You were hired as a consultant to quigley company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. the interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 10.50%, and the tax rate is 25%. the firm will not be issuing any new stock. what is quigley's wacc?

8.1%

Explanation:

Firstly, let look at the formula for calculating weighted average cost of capital (WACC):

WACC = (D/A) x r_D x (1-t) + (E/A) x r_E + (PE/A) x r_PE, where:

A: Market value of company asset;

D: Market value of company debt;

E: Market value of company equity;

PE: Market value of company preferred equity;

r_D: cost of debt;

r_E: cost of equity/retained earnings;

r_PE: cost of preferred equity;

t: tax rate

Putting all the numbers together, we have:

WACC = 35% x 6.5% x (1-25%) +  55% x  10.5%  + 10% x 6% = 8.1%

The answer is 8.08%.

Explanation:

We have the WACC is equal to weighted average of After-tax cost of Debt, Cost of preferred shares and Cost of common shares.

WACC = Percentage of Debt in capital structure * (1 - tax rate) * Cost of Debt + Percentage of Preferred share in capital structure * Cost of preferred shares + Percentage of common equity in capital structure * Cost of common equity = 35% * ( 1 - 25%) * 6.5% + 10% * 6.00% + 55% * 10.50% = 8.08%.

So, the WACC is 8.08%.

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last,   city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.