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We have the following information regarding Company Done-It-All: It has $32 million of debt, $10 million of preferred stocks, and $60 million common equity. The
We have the following information regarding Company Done-It-All:
It has $32 million of debt, $10 million of preferred stocks, and $60 million common equity. The companies currently has 30-year, 6%, semiannual coupon bonds selling at $1,210. The company has a beta of 1.1, the market expected return is 13.75%, and the risk-free rate is 5.65%. The company's preferred stocks, which pay 5% of the $100 par value as interests every year, is currently selling at $50. The company pays 35% in corporate income tax. What's the company's WACC?
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