You Were Hired as a Consultant to Quigley Company,whose Target

question 93

Multiple Choice

You were hired as a consultant to Quigley Company,whose target capital structure is 35% debt,10% preferred,and 55% common equity.The interest rate on new debt is 6.50%,the yield on the preferred is 6.00%,the cost of retained earnings is 10.50%,and the tax rate is 25%.The firm will not be issuing any new stock.What is Quigley's WACC? Round final answer to two decimal places.Do not round your intermediate calculations.

• A) 9.37%
• B) 6.73%
• C) 6.11%
• D) 8.08%
• E) 6.97%

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