Calculating WACC
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Shi Importers' balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi faces a 40% tax rate and the following data: Rd = 6%, Rps = 5.8%, and Rs = 12%.
If Shi has a target capital structure of 30% debt, 5% preferred stock, and 65% common stock, what is Shi's WACC?
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The solution explains how to calculate the WACC
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The WACC is based on the target capital structure and is calculated ...
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