Nevada Hydro is 40% debt financed and had a WACC of 9.7%. WACC = (1 - T.) +r = (1 -.35)(.085) (.40) + 1250.60) = .097 Goldensacks Company is advising Nevada Hydro to issue $75 million of preferred stock at a dividend yield of 9%. The proceeds would be used to repurchase and retire common stock. The preferred issue would account for 10% of the pre-issue market value of the firm. Goldensacks argues that these transactions would reduce Nevada Hydro's WACC to 9.4%: WACC=(1-.35)(.0857.40)+.090.10)+. 1250.50) =.094 or 9.4% Do you agree with the calculations? Explain. Give new calculation if you disagree