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AllCity Inc. is financed 40% with debt, 20% with preferred stock, and 40% with common stock. Its pre-tax cost of debt is 6%; its preferred
AllCity Inc. is financed 40% with debt, 20% with preferred stock, and 40% with common stock. Its pre-tax cost of debt is 6%; its preferred stock pays an annual dividend of $2.25 and is priced at $32. It has an equity beta of 1.3. Assume the risk-free rate is 2%, the market risk premium is 5%, and AllCity's tax rate is 35%. What is its after-tax WACC? What is its after-tax WACC? rwacc=(Roundtofivedecimalplaces.)
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