Oxy Corporation uses debt, preferred stock, and common stock to raise capital. The firm's capital structure targets the following proportions: debt, 58% ;preferred stock, 16% and common stock, 26%. If the cost of debt is 6.6% preferred stock costs 7.9% and common stock costs 10.3%, what is Oxy's weighted average cost of capital (WACC)?

Oxy Corporation uses debt, preferred stock, and common stock to raise capital. The firm's capital structure targets the following proportions: debt, 58% ;preferred stock, 16% and common stock, 26%. If the cost of debt is 6.6% preferred stock costs 7.9% and common stock costs 10.3%, what is Oxy's weighted average cost of capital (WACC)?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section9.8: The Weighted Average Cost Of Capital (wacc)

Problem 3ST

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