Avery Corporation's target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from reinvested earnings is 11.25%, and the tax rate is 25%. The firm will not be issuing any new common stock. What is Avery's WACC? 9.19% 9.55% O 8.83% 8.49% Question 3 2 pts Which of the following statements is CORRECT? O A company must try to adjust its current actual market value weights toward its target weights. The component cost of preferred stock is expressed as rp(1 - 1), because preferred stock dividends are treated as fixed charges, similar to the treatment of interest on debt. In the WACC calculation, we must adjust the cost of preferred stock (the market yield) to reflect the fact that 50% of the dividends received by corporate investors are excluded from their taxable income. o We should use historical measures of the component costs from prior financings that are still outstanding when estimating a company's WACC for capital budgeting purposes