MicroTech Corporation is subject to a 35 percent income tax rate. Given the following information about the firm’s capital structure, calculate the corporation’s weighted-average cost of capital (WACC):
Source of Funds | Market Value | Required Rate of Return |
Long-term debt | $40 million | 7.0% |
Preferred stock | $20 million | 9.0% |
Common stock | $60 million | 12.0% |
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