The following information is given for Boeing, whose target capital structure is 30% debt, 20% preferred,...

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The following information is given for Boeing, whose target capital structure is 30% debt, 20% preferred,...

The following information is given for Boeing, whose target capital structure is 30% debt, 20% preferred, and 50% common equity. The before tax cost of debt is 6.00%, the cost of preferred is 8%, and the cost of retained earnings is 12.00%. The firm will not be issuing any new stock. What is its WACC?

8.93%

9.40%

8.68%

9.85%

10.77%

business finance

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Answer 1

Answer #1

Weight Cost Weight*cost Debt 30.00% 6.00% 1.80% Preferr 20.00% 8.00% 1.60% Equity 50.00% 12.00% 6.00% WACC 9.40%

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Answer 2

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The following information is given for Boeing, whose target capital structure is 30% debt, 20% preferred,...

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		8.93%
		9.40%
		8.68%
		9.85%
		10.77%

The following information is given for Boeing, whose target capital structure is 30% debt, 20% preferred,...

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