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A company has the following capital structure Source Equity Debt Preferred Shares Proportion 60% 30% 10% The cost of preferred shares is 8% and the
A company has the following capital structure Source Equity Debt Preferred Shares Proportion 60% 30% 10% The cost of preferred shares is 8% and the before tax cost of debt is 12%. The company expects to pay a dividend of Sh. 2 per share on common stocks at the end of the year. The current price of the common stock is Sh. 20 per share. The long term growth rate of the earnings of the company is 5%. The tax rate is 30%. Required Calculate WACC
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