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You were hired as a consultant to Giambono Company, whose target capital structure is 60% debt, 15% preferred, and 25% common equity. The after-tax cost

You were hired as a consultant to Giambono Company, whose target capital structure is 60% debt, 15% preferred, and 25% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.00%, and the cost of retained earnings is 13.75%. The firm will not be issuing any new stock. What is its WACC?

a. 4.49%
b. 4.65%
c. 8.09%
d. 7.04%
e. 8.92%

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