6. Elway Electronics has debt with a market value of $350,000, preferred stock with a market...

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Finance

6. Elway Electronics has debt with a market value of $350,000,preferred stock with a market value of $150,000, and common stockwith a market value of $450,000. If debt has a cost of 8%,preferred stock has a cost of 10%, common stock has a cost of 12%,and the firm has a tax rate of 30%, what is the WACC?
a. 8.64%
b. 9.12%
c. 9.33%
d. 10.04%
PLEASE SHOW WORK

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4.3 Ratings (929 Votes)

Total firm capital 350000 150000 450000 950000 Weight of debt in the capital structure 350000 950000 03684100 3684 Weight of preferred stock in the See Answer

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6. Elway Electronics has debt with a market value of $350,000,preferred stock with a market value of $150,000, and common stockwith a market value of $450,000. If debt has a cost of 8%,preferred stock has a cost of 10%, common stock has a cost of 12%,and the firm has a tax rate of 30%, what is the WACC?a. 8.64%b. 9.12%c. 9.33%d. 10.04%PLEASE SHOW WORK