A company wishes to maintain a capital structure


A company wishes to maintain a capital structure consisting of 20% debt, 40% Preferred Stock, and 40% Common Stock. The before tax cost of the debt is 6%, the cost of the Preferred Stock is 9% and the cost of the Common Stock is 10%. The company has a 35% tax rate. Compute its after-tax WACC.

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Accounting Basics: A company wishes to maintain a capital structure
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