5) A firm has a target capital structure that consists of 60% of retained earnings and the rest in debt. The firm's cos

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5) A firm has a target capital structure that consists of 60% of retained earnings and the rest in debt. The firm's cos

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5)
A firm has a target capital structure that consists of 60% ofretained earnings and the rest in debt. The firm's cost ofretained earnings is8.3%. The firm's cost of new debt issimilar to the yield to maturity of its existing bonds, which is6.1%. The firm's tax rate is 25%. Given thisinformation, and given that the firm has no preferred stock, whatis the WACC
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