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Bergen Express has a target capital structure of 45% debt, 45% equity and 10% preferred stock. The firm's before-tax cost of debt is 5%. The

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Bergen Express has a target capital structure of 45% debt, 45% equity and 10% preferred stock. The firm's before-tax cost of debt is 5%. The preferred stock pays a $2.00 annual dividend with a par value of $25, a market price of $28 and floatation costs of $1.00 per share. The firm will raise common equity through retained earnings. The common stock dividend to be paid in one year is $1.40. The equity beta for the firm is 0.94. The expected rate of return on the market is 13 percent. The risk-free rate is 4 percent and the tax rate is 25%. What is the WACC? Group of answer choices 8.04% 10.32% 8.59% 7.68% DEC 2 489 22 0 A W

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