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AllCity, Inc., is financed 37% with debt, 12% with preferred stock, and 51% with common stock. Its pretax cost of debt i
Posted: Fri Jul 01, 2022 7:42 am
by answerhappygod
- Allcity Inc Is Financed 37 With Debt 12 With Preferred Stock And 51 With Common Stock Its Pretax Cost Of Debt I 1 (187.71 KiB) Viewed 26 times
AllCity, Inc., is financed 37% with debt, 12% with preferred stock, and 51% with common stock. Its pretax cost of debt is 6.5%, its preferred stock pays an annual dividend of $2.47 and is priced at $34. It has an equity beta of 1.11. Assume the risk-free rate is 2.3%, the market risk premium is 6.5% and AllCity's tax rate is 25%. What is its after-tax WACC? Note: Assume that the firm will always be able to utilize its full interest tax shield. The WACC is%. (Round to two decimal places.)