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 13.00%. The firm will not be issuing any new stock. What is its WACC?
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a.
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9.38%
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b.
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11.44%
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c.
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9.19%
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d.
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7.22%
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e.
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10.22%
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