Rogue Rotors Has Debt with a Market Value of $350,000,preferred

question 36

Multiple Choice

Rogue Rotors has debt with a market value of $350,000,preferred stock with a market value of $100,000,and common stock with a market value of $650,000.If debt has a cost of 7%,preferred stock a cost of 9%,common stock a cost of 13%,and the firm has a tax rate of 30%,what is the WACC?

• A)8.64%
• B)9.12%
• C)10.06%
• D)10.88%

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