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You were hired as a consultant to ABC Company, whose capital structure is 40% debt, 15% preferred stocks, and 45% common stock equity. The after-tax

You were hired as a consultant to ABC Company, whose capital structure is 40% debt, 15% preferred stocks, and 45% common stock equity. The after-tax cost of debt is 6.00%, the cost of preferred stocks is 7.50%, and the cost of common stock equity is 13.00%. What is its WACC?

1.

7.22%

2.

9.19%

3.

9.38%

4.

10.22%

5.

11.44%

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