Giambono - earnings is 12.75%. The firm will not be issuing...

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You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common using retained
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Unformatted text preview: earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC? b. 9.26% Weights Costs Debt 40% 6.00% Preferred 15% 7.50% Common 45% 12.75% WACC = w d × r d × (1 − T) + w p × r p + w s × r s 9.26%...
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This note was uploaded on 12/11/2010 for the course ACCT 200 taught by Professor Bill during the Spring '10 term at York University.

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