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Reactive Power Generation has the following capital structure. Its corporate tax rate is 35%. What is the companys WACC?...

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Finance

Reactive PowerGeneration has the following capital structure. Its corporate taxrate is 35%.

What is the companysWACC? Do not round intermediate calculations. Enter your answer asa percent rounded to 2 decimal places.

SecurityMarket ValueRequired Rate of Return
Debt30 million6%
Preferred stock30 million8%
Common stock40 million12%

Answer & Explanation Solved by verified expert
4.2 Ratings (561 Votes)
Weighted Average Cost of Capital WACC The Weighted Average Cost of Capital WACC is calculated by using the following formula Weighted Average Cost of Capital WACC After Tax    See Answer
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Reactive PowerGeneration has the following capital structure. Its corporate taxrate is 35%.What is the companysWACC? Do not round intermediate calculations. Enter your answer asa percent rounded to 2 decimal places.SecurityMarket ValueRequired Rate of ReturnDebt30 million6%Preferred stock30 million8%Common stock40 million12%

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