Johnson Industries finances its capital projects with 40% debt, 10% preferred and 50% common stock. Using the

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Johnson Industries finances its capital projects with 40% debt, 10% preferred and 50% common stock. Using the following data, what is Johnson Industries' WACC?

The company can issue new bonds at a YTM of 8.00%

The cost of preferred stock is 9.00%

The market risk premium (RPm) is 5.00%

Johnson Industries' beta (b) equal to 1.2

Assume the firm will be able to use retained earnings to fund the equity portion of its capital budget

The company's tax rate is 30%

a. 8.33%

b. 8.95%

c. 9.14%

d. 10.92%

Posted Date: May 16, 2024 04:16 PM

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Johnson Industries finances its capital projects with 40% debt, 10% preferred and 50% common stock. Using the

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