Leo hired as a consultant to a company, the company target capital structure is 40% debt, 15% preferred, and 45% common

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answerhappygod
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Leo hired as a consultant to a company, the company target capital structure is 40% debt, 15% preferred, and 45% common

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Leo hired as a consultant to a company, the company targetcapital structure is 40% debt, 15% preferred, and 45% commonequity. The after-tax cost of debt is 6.00%, the cost of preferredis 7.50%, and the cost of retained earnings is 12.50%. The firmwill not be issuing any new stock. What is its WACC?
a. 10.98% b. 9.15% c. 7.59% d. 9.88% e. 11.16%
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