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Edwards Resorts has a current capital structure that is 50% equity, 40% debt, and 10% preferred stock. This is considered optimal in the capital structure.
Edwards Resorts has a current capital structure that is 50% equity, 40% debt, and 10% preferred stock. This is considered optimal in the capital structure. Edward is considering a $40 million capital budgeting project. Edward has estimated the following: - After-tax cost of debt: 8.5% - Cost of preferred stock: 9.5% - Cost of internal equity: 14.0% If all equity comes from internal sources, what should Edwards weighted average cost of capital (WACC) be for this project? Group of answer choices
10.67%
11.35%
9.45%
12.15%
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