What is the WACC for a firm using 55% equity with a required return of 15%, 35% debt with a required return of 8%, 10% preferred stock with a required return of 10%, and a tax rate of 35%?

Name: What is the WACC for a firm using 55% equity with a required return of 15%, 35% debt with a required return of 8%, 10% preferred stock with a required return of 10%, and a tax rate of 35%?
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Quizplus · Accepted Answer

WACC = (0.55 × 0.15) + (0.1 × 0.1) + [0.35 × .08 × (1 - 0.35)] = 0.1107, or 11.07%

What Is the WACC for a Firm Using 55% Equity