Question
Shark Corporation's target capital structure is 30% debt, 15% preferred, and 55% common equity. The interest rate on new debt is 7%, the yield on
Shark Corporation's target capital structure is 30% debt, 15% preferred, and 55% common equity. The interest rate on new debt is 7%, the yield on the preferred is 6.00%, the cost of common from reinvested earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Shark's WACC?
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
14th Edition
0357516664, 978-0357516669
