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A company has a target capital structure of 60% common stock, 5% preferred stock and 35% debt. Cost of equity is 12%, cost of preferred
A company has a target capital structure of 60% common stock, 5% preferred stock and 35% debt. Cost of equity is 12%, cost of preferred stock is 5%, and pretax cost of debt is 7%. The relevant tax rate is 35%. What is the WACC? Why doesn't the company use more preferred stock financing instead of debt
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