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You work for Smith Company as a consultant.  Kroncke target capital structure is 30% debt, 20% preferred, and 50% common equity.  The after-tax cost of debt is 8%, the cost of preferred is 6.5%, and the cost of retained earnings is 13.25%. The firm will not be issuing any new stock.  What is its WACC?

a)            10.07%

b)            10.37%

c)            9.48%

d)            10.68%

e)            10.325%

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