A Firm Is Financed 55% by Common Stock,10% by Preferred

question 67

Multiple Choice

A firm is financed 55% by common stock,10% by preferred stock and 35% by debt.The required return is 15% on the common,10% on the preferred,and 8% on the debt.If the tax rate is 35% what is the WACC?

• A) 10.72%
• B) 11.07%
• C) 11.70%
• D) 12.05%

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