Question
You were hired as a consultant to Locke Company, and you were provided with the following data: Target capital structure: 40% debt, 10% preferred, and
You were hired as a consultant to Locke Company, and you were provided with the following data: Target capital structure: 40% debt, 10% preferred, and 50% common equity. The after tax cost of debt is 4.00% and the cost of preferred is 7.50%, the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is the firm's WACC?
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Analysis for Financial Management
Authors: Robert Higgins
11th edition
77861787, 978-0077861780
