Question: Well Importers balance sheet shows $300 million in debt, 50 million dollar in preferred stock, and $250 million in total common equity. Well faces a 40 percent tax rate and the following data:
Rd =6%, rps = 5.8%, and rs = 12%. If Well has a target capital structure of 30% debt, 5 percent preferred stock, and 65% common stock, calculate Well’s WACC?