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Calculate the firm's WACC using retained earnings Target capital structure: 50% debt, 10% preferred, 40% common equity Preferred stock dividend: 9$ Preferred stock price: $125
Calculate the firm's WACC using retained earnings
Target capital structure: 50% debt, 10% preferred, 40% common equity
Preferred stock dividend: 9$
Preferred stock price: $125
Before-tax cost of debt: 8%
Required return on common stock: 11%
Marginal tax rate: 25%
A. 8.12%
B. 7.63%
C. 6.82%
D. 9.28%
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