Wallys plans to finance the project with 25% debt, 15% preferred stock, 35% retained earnings, and 25%
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Wally’s plans to finance the project with 25% debt, 15% preferred stock, 35% retained earnings, and 25% newly issued equity. The company’s cost of debt for six years is 3%, while the cost of preferred stock is estimated to be 8%. The company’s cost of equity (retained earnings) is estimated to be 12%. Flotation costs for any new equity issued would be 10%. Calculate the WACC for the project. Round the percentage to two decimal places.
Related Book For
Fundamentals Of Financial Management
ISBN: 9780273713630
13th Revised Edition
Authors: James Van Horne, John Wachowicz
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