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AllCity, Inc., is financed 43% with debt, 11% with preferred stock, and 46% with common...

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Finance

AllCity, Inc., is financed 43% with debt, 11% with preferred stock, and 46% with common stock. Its pretax cost of debt is 5.8%, its preferred stock pays an annual dividend of $2.53 and is priced at $34. It has an equity beta of 1.16. Assume the risk-free rate is 2.3%, the market risk premium is 6.6% 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.

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