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Show all of your work. Smith Electronics, Inc. has determined its cost of each source...

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Finance

Show all of your work.

Smith Electronics, Inc. has determined its cost of each source of capital and its optimal capital structure, which is composed of the following sources and target market value proportions:

Source of Capital

Target Market Proportions

After-Tax Cost

Long-Term Debt

30%

6%

Preferred Stock

10%

9%

Common Stock Equity

60%

12%

Calculate the Weighted Average Cost of Capital (WACC) for Smith Electronics using the information provided above.

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