RPm= 4%

Rrf = 5%

company's tax rate = 30%

15. Assume that a company has a target debt-to-equity capital structure of 2. The company currently pays 8% annually on its bonds. There are 10 years until maturity, and the bonds currently trade at 93% of par. Bond flotation costs are 3%. The company's beta is 1.5, the and. a. Calculate the WACC b. Assume that the company changed its target capital structure to 47% long- term debt, 20% preferred stock, and 33% common stock. If preferreds are issued at $25, pay a dividend of 7%, and have flotation costs of 5%, recalculate the company's WACC. c. Briefly explain why the WACC has changed. I 15. Assume that a company has a target debt-to-equity capital structure of 2. The company currently pays 8% annually on its bonds. There are 10 years until maturity, and the bonds currently trade at 93% of par. Bond flotation costs are 3%. The company's beta is 1.5, the and. a. Calculate the WACC b. Assume that the company changed its target capital structure to 47% long- term debt, 20% preferred stock, and 33% common stock. If preferreds are issued at $25, pay a dividend of 7%, and have flotation costs of 5%, recalculate the company's WACC. c. Briefly explain why the WACC has changed