Question
You were hired as a consultant to Giambono Company, whose target capital structure is 55% debt and 45% common equity. The after-tax cost of debt
You were hired as a consultant to Giambono Company, whose target capital structure is 55% debt and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of equity is 12.00%. The firm will not be issuing any new stock. What is its WACC (after tax)?
a. 11.25% b. 8.50% c. 5.40% d. 8.70%
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Entrepreneurial Finance
Authors: J . chris leach, Ronald w. melicher
4th edition
538478152, 978-0538478151
