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The following information is available for a company: Bonds are priced at par and have an annual coupon rate of 2%. Preferred stock is priced
The following information is available for a company: Bonds are priced at par and have an annual coupon rate of 2%. Preferred stock is priced at $8.18 and pays an annual dividend of $1.35. Common equity has a beta of 3. The risk-free rate is 4% and the market premium is 11%. Capital structure: Debt = 30%; Preferred stock = 15%; Common equity = 55%. The tax rate is 35%. The weighted average cost of capital (WACC) for the company is closest to: Group of answer choices
13.4%.
11.5%.
14.3%.
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