Pfd Company has debt with a yield to maturity of 8%, a cost of equity of 18%,

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Pfd Company has debt with a yield to maturity of 8%, a cost of equity of 18%, and a cost of preferred stock of 12%. The market values of its debt, preferred stock, and equity are \($12\) million, \($5\) million, and \($18\) million, respectively, and its tax rate is 35%. What is this firm’s WACC?

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Corporate Finance

ISBN: 9780273792024

3rd Global Edition

Authors: Peter Demarzo, Jonathan Berk

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