Oxy Corporation uses​ debt, preferred​ stock, and common stock to raise capital. The​ firm's capital structure targets the following​ proportions: debt, 53​%; preferred​ stock, 11​%; and common​ stock, 36​%. If the cost of debt is 5.5​%, preferred stock costs 7.6​%, and common stock costs 11.9​%​, what is​ Oxy's weighted average cost of capital ​ (WACC​)?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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   Oxy Corporation uses​ debt, preferred​ stock, and common stock to raise capital. The​ firm's capital structure targets the following​ proportions: debt,

53​%;

preferred​ stock,

11​%;

and common​ stock,

36​%.

If the cost of debt is

5.5​%,

preferred stock costs

7.6​%,

and common stock costs

11.9​%​,

what is​ Oxy's weighted average cost of capital

​ (WACC​)?

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