Question 9.9: Micron’s capital structure consists of: (1) 15% accounts pay...
Micron’s capital structure consists of: (1) 15% accounts payable and other non-interest-bearing debt, (2) 45% bank debt on which they pay 10% interest, (3) 5% preferred stock, (4) 15% retained earnings, and (5) 20% stock at par plus additional paid in capital. They are in the 30% tax bracket. They have outstanding preferred stock with a $75 coupon rate for every $1,000 of par value. They have estimated their cost of common equity at 14.6%. What is their present WACC?
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