WACC = weight of debt * after tax cost of debt + weight of equity * cost of equity + weight of preferred stock * cost of preferred stock
total value of firm = 50+10+15
= 75 million
=>
WACC = (15/75) * 0.04 * (1-0.25) + (50/75) * 0.09 + (10/75) * 0.07
= 7.53%
A firm has $50 million of common stock, $10 million of preferred stock, and $15 million...
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