6. You were hired as a consultant to Sabang Company, whose target capital structure is 40% debt, 30% preferred, and 30% common equity. The after-tax cost of debt is 5.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC? a. 8.08% b. 8.488 C. 9.243 d. 9.838 e. 10.12 I 7. Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D. - $2.50), the dividend is expected to grow at a constant rate of 58 a year, and the common stock currently sells for $52.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the company's WACC if all the equity used is from retained earnings? a. 7.078 b. 7.26% c. 7.40 d. 7.70% e. 8.008