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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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