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P10-3 WACC Suppose that Ferry Landings, Inc., Inc. has a capital structure of 37 percent equity, 17 percent preferred stock, and 46 percent debt. If
P10-3 WACC Suppose that Ferry Landings, Inc., Inc. has a capital structure of 37 percent equity, 17 percent preferred stock, and 46 percent debt. If the before-tax component costs of equity, preferred stock and debt are 14.5 percent, 11 percent and 9.5 percent, respectively. What is Ferry Landings, Inc.s WACC if the firm faces an average tax rate of 30 percent?
Using the WACC equation:
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