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problem: You were employed as a consultant to Locke Company, and you were provided with the Following data: 

Target capital structure: 40 percent debt, 10 percent preferred, & 50 percent common equity. The interest rate on new debt is 7.5 percent, the yield on the preferred is 7.0 percent, the cost of retained earnings is 11.50 percent, & the tax rate is 40 percent. The firm will not be issuing any new stock. find out the firm's WACC? 

[A] 8.25%

[B] 8.38%

[C] 8.49%

[D] 8.61%

[E] 8.76%

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918003

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