Question 5

Calculate the weighted average cost of equity (WACE) when

Cost of Equity
Cost of Common Stock	24%
Cost of Preferred Stock	10%
Cost of Retained Earnings	20%

Approved Stock Split

Common Stock 50%

Preferred Stock 25%

Retained Earnings 25%

	a.	WACE<12%
	b.	WACE>20%
	c.	WACE=19.5%
	d.	WACE=15.9%
	e.	None of the above