The weighted average of the ﬁrm's costs of equity, preferred stock, and after tax debt is the:

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The weighted average of the firm's costs of equity, preferred stock, and after tax debt is the weighted average cost of capital (WACC). This is the minimum return that a company must earn on its investments to satisfy its creditors, owners, and other investors. It is used as the discount rate for future cash flows in capital budgeting decisions.

The Weighted Average of the ﬁRm's Costs of Equity, Preferred