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You were hired as a consultant to Locke Company, and you were provided w the following data: Target capital structure: 40% debt, 10% preferred, and
You were hired as a consultant to Locke Company, and you were provided w the following data: Target capital structure: 40% debt, 10% preferred, and 50 common equity. The interest rate on new debt is 7.00%, the yield on the preferred is 6.00%, the cost of retained earnings is 12.50%, and the tax rate 40%. The firm will not be issuing any new stock. What is the firm's WACC? a. 8.65% b. 8.89% c. 9.01% d. 8.77% e. 8.53% was
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