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Zungle Mutual Corp. has a capital structure that consists of 35% debt, 10% preferred stock, and 55% common equity. The yield on the debt is
Zungle Mutual Corp. has a capital structure that consists of 35% debt, 10% preferred stock, and 55% common equity. The yield on the debt is 6.50%, the yield on the preferred stock is 6.00%, the cost of common equity is 13.25%. The company's average tax rate is 30%. What is the company's weighted aveage cost of capital (WACC)?
1. | 9.25% | |
2. | 9.48% | |
3. | 9.99% | |
4. | 11.20% | |
5. | 9.16% |
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