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GenBio Labs's balance sheet shows a total of $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity = Rd
GenBio Labs's balance sheet shows a total of $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity = Rd = 6.0%. The company has $15 million of Preferred Stock with a Rp = 8.5% required return. The company has $225 million of common stock with a required return of Rs, = 14.0%. What is the WACC based on the target capital structure of 30% Debt, 10% Preferred Stock, and 60% Common Stock? TAX RATE = 25%
a. 9.0%
b. 9.4%
c. 9.8%
d. 10.2%
e. 10.6%
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