6. Fifth Corporations target capital structure is 25% debt, 10% preferred, and 65% common equity. The interest rate on new debt is 6.00%, the yield on the preferred is 7.00%, the cost of common from 2 retained earnings is 12.00%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Fifth's WACC? A. 6.15% B. 7.48% C. 8.82% D. 9.40% E. 10.00%

7. You were hired as a consultant to General Dynamics, whose target capital structure is 40% debt, 10% preferred, and 50% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.00%. The firm will not be issuing any new stock. What is its WACC? A. 8.33% B. 7.49% C. 6.66% D. 7.98% E. 9.15%