Reactive Power Generation has the following capital structure. Its corporate tax rate is 35%. What is the companys WACC?...

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Reactive PowerGeneration has the following capital structure. Its corporate taxrate is 35%.
What is the companysWACC? Do not round intermediate calculations. Enter your answer asa percent rounded to 2 decimal places.
Security Market Value Required Rate of Return
Debt 30 million 6%
Preferred stock 30 million 8%
Common stock 40 million 12%

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4.2 Ratings (561 Votes)

Weighted Average Cost of Capital WACC The Weighted Average Cost of Capital WACC is calculated by using the following formula Weighted Average Cost of Capital WACC After Tax See Answer

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Reactive PowerGeneration has the following capital structure. Its corporate taxrate is 35%.What is the companysWACC? Do not round intermediate calculations. Enter your answer asa percent rounded to 2 decimal places.SecurityMarket ValueRequired Rate of ReturnDebt30 million6%Preferred stock30 million8%Common stock40 million12%

Security	Market Value	Required Rate of Return
Debt	30 million	6%
Preferred stock	30 million	8%
Common stock	40 million	12%