I have the following data:
40% debt, 10% preferred, and 50% common equity. After-tax cost of debt 4.00%, cost of preferred 7.50% and cost of retained earnings is 11.50%
in using this formula:
WACC = wdrd(1-T) + wprp + wcrs
r=(40%)(4.00%)+(10%)(7.50%)+(50%)(11.50%)=8%
Is this right