A company has the following capital structure

| June 14, 2018

A company has the following capital structure:1. Target weightings: 30% debt, 20% preferred stock,50%common equity2. Tax rate 30%3. The cost of debt 6.5%4. Cost of preferred stock is 8%5. The company’s common stock have a value of $40 and a dividend of D0 = $3. The dividend is expected to grow at 6% forever.Calculate the weighted average cost of capital

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