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What would be the WACC given the following: The firms target capital of structure is: 60% debt, 30% common equity, 10% preferred stock debt will
What would be the WACC given the following:
The firms target capital of structure is: 60% debt, 30% common equity, 10% preferred stock debt will be in the form of bonds that have an 8% coupon; retained earnings have a cost of 12%; common stock has a cost of 16% and preferred stock has a cost of 14%. the firm has a tax rate of 20%. given the high profitability of the company there is sufficient retained earnings to cover all capital investments
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