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You were hired as a consultant to a Montevallo company whose target capital structure is 50% debt, 10% preferred, and 40% common equity. The yield
You were hired as a consultant to a Montevallo company whose target capital structure is 50% debt, 10% preferred, and 40% common equity. The yield to maturity on new debt is 6.50%, the cost of the preferred is 7.00%, the cost of retained earnings is 8.5%, and the tax rate is 30%. The firm will not be issuing any new stock. What is the companys WACC?
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