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Average coporation target capital structure is 45% debt, 15% preferred, and 40% common equity. The interest rate on new debt is 7.25%, the yield on
Average coporation target capital structure is 45% debt, 15% preferred, and 40% common equity. The interest rate on new debt is 7.25%, the yield on the preferred is 6.75%, the required return on common stock is from reinvested earnings is 13.25%, and the tax is 21%. the firm will not be issuing any new common stock. What is Avery's WACC?
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