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Emeka Industries can borrow funds at a 7 percent interest rate. Its preferred stock sells...

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Finance

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Emeka Industries can borrow funds at a 7 percent interest rate. Its preferred stock sells for 40$/share and pays an annual dividend of 45/share. The company has a beta of 1.9, risk-free investments currently pay 4 percent. The company pays taxes at a 40 percent rate. The required rate of return for an average stock is 9 percent. Emeka's Target Capital structure consists of 10 percent preferred stock, 60 percent debt, and... What is the Emeka's WACC? Ca. 3.52% b.4.19% C. 9.85% d. 7.57% e. 9.25%

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