A company plans to maintain its optimal capital structure


A company plans to maintain its optimal capital structure of 30% debt, 20% preferred stock, and 50% common stock far into the future. The required return on each component is: debt = 10%, preferred stock = 11%, and common stock = 18%. Assuming a 40% marginal tax rate, what is the WACC of this company?

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Financial Management: A company plans to maintain its optimal capital structure
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