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CCC Inc.'s target capital structure is 55% debt, 15% preferred, and 30% common equity. The interest rate on new debt is 5.50%, the yield on
CCC Inc.'s target capital structure is 55% debt, 15% preferred, and 30% common equity. The interest rate on new debt is 5.50%, the yield on the preferred is 6.5%, the cost of retained earnings is 7.25%, and the tax rate is 40%. The firm will not be issuing any new stock. What is the WACC?
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