What is the WACC

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Question - WACC -

1. The target capital structure for ABC Company is 20% debt, 40% preferred, and 40% common equity. The before-tax cost of debt is 3.50%, the yield on the preferred is 8%, the cost of common stock is 15%, and the tax rate is 30%. What is the WACC?

2. ABC Company has 20% in debt and remainder in common equity. The cost of debt is 3.50%, the cost of common stock is 15%, and the tax rate is 30%. What is the WACC?

Reference no: EM132814482

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