hard · Principles of Finance cost-of-capital-structure
A firm has $100 million of 6% preferred stock (market value) in its $1,000 million total capital structure. The WACC without preferred stock was 10%.
If the cost of equity is 12% (60% weight) and after-tax debt is 5% (30% weight), what is the adjusted WACC?
- 9.30%
- 10.00%
- 8.70%
- 9.15%
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