ABC Corporation has a target capital structure of 35 percent common stock, 10 percent preferred stock, and 55 percent debt. Its cost of equity is 20 percent, the cost of preferred stock is 4.5 percent, and the pre-tax cost of debt is 7 percent. What is the firm's WACC given a tax rate of 40 percent?

Responses

• 9.58

  9.58
• 9.76

  9.76
• 12.35

  12.35
• 14.56