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Problem 1 4 - 9 Calculating WACC [ LO 3 ] Ninecent Corporation has a target capital structure of 7 0 percent common stock, 5

Problem 14-9 Calculating WACC [LO3]
Ninecent Corporation has a target capital structure of 70 percent common stock, 5 percent preferred stock, and 25 percent debt. Its cost of equity is 12 percent, the cost of preferred stock is 6 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 24 percent.
a. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal plafces, e.g.,32.16.)
b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
Answer is complete but not entirely correct.
\table[[a. WACC,8.67,%
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