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You were hired as a consultant to Giambono Company, whose target capital structure is 4 0 % debt, 1 5 % preferred, and 4 5

You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 16.00%. The firm will not be issuing any new stock. What is its WACC?
a.
10.94%
b.
8.26%
c.
8.69%
d.
13.41%
e.
10.73%

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