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Bensons firm balance sheet shows $200 million of debt, $100 million in preferred stock, and $100 million in total common equity. Dave faces a 20%
Bensons firm balance sheet shows $200 million of debt, $100 million in preferred stock, and $100 million in total common equity. Dave faces a 20% tax rate, and we have the following data: rd=8%, rps= 9%, and rs=12%. What is Dave s weighted average cost of capital? WACC = weighted average cost of capital = (wd * rdt) + (wps * rps) + (wce * rs) where wd, wps, and rps are the weight of debt, preferred stock and common equity, respectively. Remember to adjust rd to an after-tax cost of debt. Indicate a percentage to the tenth place
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