Your firm has 8 million shares of common stock outstanding


Your firm has 8 million shares of common stock outstanding with a market price of $7.00 per share. The company has outstanding preferred stock with a market value of $20 million, and 35,000 bonds outstanding, each selling at 92% of par value ($1000). The cost of equity is 16%, cost of preferred is 10%, and the cost of debt is 7%. If the tax rate is 35%, what is WACC?

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Financial Management: Your firm has 8 million shares of common stock outstanding
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