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  3. 8. allcity, inc., is financed 40% with debt, 12% w

8. AllCity, Inc., is financed 40% with debt, 12% with preferred stock, and 48% with...

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Accounting

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8. AllCity, Inc., is financed 40% with debt, 12% with preferred stock, and 48% with common stock. Its pretax cost of debt is 6.1%, its preferred stock pays an annual dividend of $2.53 and is priced at $33. It has an equity beta of 1.14. Assume the risk-free rate is 2.2%, the market risk premium is 6.8% and AllCity's tax rate is 25%. What is its after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield. The WACC is %. (Round to two decimal places.)

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