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B C E D 3. Assume the following capital structure characteristics for ISHOULDDAGROWN Corporation: Debt = $450,000,000 Preferred Stock = $50,000,000 Common Equity = $500,000,000

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B C E D 3. Assume the following capital structure characteristics for ISHOULDDAGROWN Corporation: Debt = $450,000,000 Preferred Stock = $50,000,000 Common Equity = $500,000,000 Id = required return on debt = 6.00% T = Corporate Tax Rate = 35% Ips = Required Return on Preferred Stock = 5.25%; rs = Required Return on Common Stock = 12%. 3a. What is the WACC for ISHOULDDAGROWN Corp.? 6%(1-0.35)x0.45 +5.25% 0.05+ 12% x.05= 8.0175% 3b. Why is the WACC for ISHOULDDAGROWN Corp. different from the WACC for ICOULDDAGROWN Corp.? B C E D 3. Assume the following capital structure characteristics for ISHOULDDAGROWN Corporation: Debt = $450,000,000 Preferred Stock = $50,000,000 Common Equity = $500,000,000 Id = required return on debt = 6.00% T = Corporate Tax Rate = 35% Ips = Required Return on Preferred Stock = 5.25%; rs = Required Return on Common Stock = 12%. 3a. What is the WACC for ISHOULDDAGROWN Corp.? 6%(1-0.35)x0.45 +5.25% 0.05+ 12% x.05= 8.0175% 3b. Why is the WACC for ISHOULDDAGROWN Corp. different from the WACC for ICOULDDAGROWN Corp

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