Reactive Industries has the following capital structure. Its corporate tax rate is 35 percent. What is its WACC?
SECURITY MARKET VALUE REQUIRED RATE OF RETURN
DEBT $20 Million 6%
PREFERRED STOCK $10 Million 8%
COMMON STOCK $50 Million 12%
WACC= weightage of common stock x cost of common stock + weightage of preferred ...
The solution calculates WACC