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You were hired as a consultant to Costly corp, whose target capital structure is 40%...

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Finance

You were hired as a consultant to Costly corp, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC?

Group of answer choices

9.83%

9.26%

10.56%

8.98%

10.21%

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