You were hired as a consultant to Poli Company whose target

You were hired as a consultant to Poli 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 retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC? show work.

The WACC is defined as the weighted sum of the costs of debt, preferred equity and common equity.

Therefore WACC is calculated by the formula here:

WACC = .45 *12.75 + .40*6 + .15*7.5 = 9.263%

WACC = 9.263%

You were hired as a consultant to Poli Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is

You were hired as a consultant to Poli Company whose target

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