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AllCity, Inc., is financed 45% with debt, 15% with preferred stock, and 40% with common stock. Its pretax cost of debt i
Posted: Sun Jul 03, 2022 6:42 am
by answerhappygod
- Allcity Inc Is Financed 45 With Debt 15 With Preferred Stock And 40 With Common Stock Its Pretax Cost Of Debt I 1 (37.67 KiB) Viewed 12 times
AllCity, Inc., is financed 45% with debt, 15% with preferred stock, and 40% with common stock. Its pretax cost of debt is 5.8%, its preferred stock pays an annual dividend of $2.51 and is priced at $32. It has an equity beta of 1.11. Assume the risk-free rate is 1.8%, the market risk premium is 7.4% 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.)