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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
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 common stock has the following CAPM data: risk-free rate of 5.00%, market-risk premium of 6.00%, and Beta = 1.05. The firm will not be issuing any new stock. What is its WACC?
(Answer as a whole percentage. i.e. 5.35%, not 0.0535)
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