Question: Reactive Power Generation has the following capital structure. Its corporate tax rate is 40%. Security Market Value Required Rate of Return Debt $ 10 million

Reactive Power Generation has the following capital structure. Its corporate tax rate is 40%.

Security Market Value Required Rate of Return
Debt $ 10 million 2 %
Preferred stock 20 million 4
Common stock 50 million 8

What is its WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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