Alpha corp is financed 30 with debt 10 with preferred stock, Ask an Expert

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Alpha Corp. is financed 30% with debt, 10% with preferred stock, and 60% with common stock. Its pretax cost of debt is 6%, its preferred stock pays an annual dividend of 2.50 and is priced at $30. It has an equity beta of 1.1. Assume the risk-free rate is 2%,the market risk premium is 7% and Alpha's tax rate is 40%. What is its after-tax WACC?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91820949

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