Exercise #4: The ytm is 9%, the coupon on ABCs debt is 6%. The tax rate is 40%. Preferred stock trades at $15 and pays a dividend of $2. The riskf-free rate is 6%, the mkt risk premium is 10%. ABCs beta is 0.8. The debt, preferred and common proportions in the capital structure are 0.303, 0.049 and 0.648, resp.

WACC = [10]..% (2pts)

(please leave to the fourth decimal place)