FIN 5130 – Avery Corporation’s target capital structure is 35% debt
June 7th, 2024
Avery Corporation’s 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 common from reinvested earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Avery’s WACC? Can you please explain me what the formula for thw WACC is?