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Accounting

Problem:

Healthy Snacks, Inc. has a target capital structure of 55 percent common stock, 5 percent preferred stock, and 40 percent debt. Its cost of equity is 14.3 percent, the cost of preferred stock is 8.9 percent, and the pretax cost of debt is 8.1 percent.

Required:

Question: What is the company's WACC if the applicable tax rate is 35 percent?

A) 10.83 percent.

B) 9.61 percent.

C) 10.34 percent.

D) 9.29 percent.

E) 10.43 percent.

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166661

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