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Using 14% as the cost of common equity calculate the wacc. Firm calculating cost of capital for major expansion program. Tax rate = 40%. 15-year,

Using 14% as the cost of common equity calculate the wacc.

Firm calculating cost of capital for major expansion program.

Tax rate = 40%.

15-year, 12% coupon, semiannual payment noncallable bonds sell for $1,153.72. New bonds will be privately placed with no flotation cost.

10%, $100 par value, quarterly dividend, perpetual preferred stock sells for $111.10.

Target capital structure: 30% debt, 10% preferred, 60% common equity.

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