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

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You were hired as a consultant to Giambono Company, 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 12.00%. The firm will not be issuing any new stock. What is its WACC?a. 8.93%b. 6.96%c. 6.69%d. 7.59%e. 7.68%

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4.3 Ratings (722 Votes)
To calculate the Weighted Average Cost of Capital WACC we use the formula textWACC wd cdot rd wp cdot rp we cdot re where wd wp we are    See Answer
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