Question
XYC Ccompany.'s capital structure includes debt, preferred stock and equity. The market value of its preferred stock is $55 million. The book and market values
XYC Ccompany.'s capital structure includes debt, preferred stock and equity. The market value of its preferred stock is $55 million. The book and market values of its debt outstanding are $100 million and $250 million, respectively. Frozen has 5 million shares of common stock outstanding with a current market price of $73 per share. Its book value of equity is $189 million. You also have the following information: Cost of Preferred stock = 11.5%; Cost of Debt = 7%; Cost of Equity = 13%; and Tax Rate = 45%.
What is XYC Company.'s WACC?
A. 11.91%
B. 15.00%
C. 9.46%
D. 7.00%
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