Question
Reactive Power Generation has the following capital structure. Its corporate tax rate is 40%. Security Market Value Required Rate of Return Debt $ 10 million
Reactive Power Generation has the following capital structure. Its corporate tax rate is 40%.
| Security | Market Value | Required Rate of Return | ||||
| Debt | $ | 10 | million | 2 | % | |
| Preferred stock | 20 | million | 4 | |||
| Common stock | 50 | million | 8 | |||
What is its WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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Derivatives Markets
Authors: Rober L. Macdonald
4th edition
321543084, 978-0321543080
