Question

Based on the information provided below, compute the Weighted Average Cost of Capital.


Acme International Required Capital Sources                                 Required
                                                                                                            Return rates

Common Stock and Retained Earnings                $ 400,000               8%
Preferred Stock                                                       $ 100,000                7%
Corporate Bonds                                                    $ 300,000               10%

Corporate tax rate                                                       35%

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WACC Calculation

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