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CFA Level 1
Corporate Finance

Calculating WACC for Company XYZ

Medium Cost Of Capital Weighted Average Cost Of Capital

Company XYZ is evaluating a new project and needs to calculate its Weighted Average Cost of Capital (WACC). The company has the following capital structure: 40% debt, 50% equity, and 10% preferred stock. The cost of debt is 5%, the cost of equity is 10%, and the cost of preferred stock is 6%. Given these inputs, what is the WACC for Company XYZ?

Hint

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% Correct82%