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ABC Corporation has a target capital structure of 60 percent common stock, 5 percent preferred...

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Finance

ABC Corporation has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of common stock is 10 percent, the cost of preferred stock is 5 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 30 percent, what is the WACC?

a. 8.700%

b. 6.312%

c. 7.965%

d. 5.246%

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