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The capital structure of ABC Inc. is: $10 million in preferred stock financing with a cost of 9%, $40 million in common stock financing with
The capital structure of ABC Inc. is: $10 million in preferred stock financing with a cost of 9%, $40 million in common stock financing with the cost of common equity as 18.5%, and $50 million of debt with a before-tax cost of 10%. Given a tax rate of 40%, what is ABCs weighted average cost of capital?
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