WACC

Candy's Treehouse has a target capital structure of 10% preferred stock, 40% debt, and the remainder as common equity. Historically, the firm has maintained a capital structure of 5% preferred stock, 45% debt, and the remainder as common equity. Your new intern has been tasked with estimating the before-tax costs of the capital sources for this firm and has determined the before-tax cost of equity to be 14%, the before-tax cost of debt to be 8%, and the before tax cost of preferred to be 6%. What is the firm's WACC? Assume a tax rate of 40% 3 4 5 6 7 8 9 10 11 12 13 14 Tax Rate Debt Preferred Steck Common Stock Before-Tex Cost of Debt Before-Tax Cost of PS Before-Tax Cost of Equity After Tax Cost of Debt After-Tax Cost of Ps After Tea Cost of quity 17 WACC (Using Before Tas 18 WACC (Uring After To 15 SERPREN 16 19 20 21 TYPE OKAY! FORMU Type # er formla ok! 22 CHOOSE WACC= 6pts Question 7 6 pts Wara (1-T) + Wstasta (1-7)+ Wasps + Was Candy's Treehouse har a target ospital structure of 10% preferred stock, 40% debt, and the minder a comunen esity. Historically, the firm har maintained a capital structure of preferred stock, 45% debt, and the reminder as omnca ngay. Your new intem has bo takd wath eating the before-tax coers of the capital socrore for the firm sad hon denied the before-tax cost of equity to be 14%, the before-tax cost of debt to be 8, and the belle tas pit of preferred to be 6% What is the firm's WACC? Assume of 40% Your choice on what exactly to fill out on this problem depends on what you at gives me of befine-tas versus aler-tas You only need to four one of the 2 WACC MAKE SURE TO RENAME YOUR FILE NAME TO YOUR LAST NAME