WACC = (Weight of debt * After-tax cost of debt) + (Weight of preferred * Cost of preferred) + (Weight of common equity * Cost of common equity)
so,
WACC = (0.40 * 0.06) + (0.15 * 0.0750) + (0.45 * 0.1275)
WACC = 0.0926 (9.26%), the answer is 9.26%.
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC? 8.70% 07.92% 8.87% 7.66%
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC?
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common equity is 12.25%. The firm will not be issuing any new stock. What is its WACC? Answer is a percentage
you were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6%, the cost of preferred is 7.50%, and the common stock has the following CAPM data: risk free rate of 5%, market risk premium of 6%, and beta 1.05. The firm will not be issuing any new stock. What is its WACC
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred stock, and 45% common equity. The cost of debt is 9.00%, cost of preferred stock is 7%, and cost of common equity is 12.75%. The tax rate is 40%. What is its WACC? A) 8.73% B) 8.95% C) 9.12% D) 8.81% E) 8.68%
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