Rilke Healthcare Co. has a target capital structure of $30 million debt, $15 million preferred stock, and $55 million common equity. The company's after-tax cost of debt is 7.0%. The cost of preferred stock is 11.0%, the cost of retained earnings is 15.0%, and the cost of new common stock is 17.0%. Suppose that the firm issues new common stock to fund the entire equity portion, what is the firm's weighted average cost of capital (WACC)?

Answer rating: 100% (QA)

Debt proportion is 30 30 15 55 03 Preferred stock proportion is 15 30 15 55 015 Co... View the full answer