Question 47 (30 points)
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Shi Import-Export's balance sheet shows $300 million in debt, $50 million in
preferred stock, and $250 million in total common equity. Shi's tax rate is 25%, rd
=6%, rps = 5.8%, and rs = 12%. If Shi has a target capital structure of 20% debt, 5%
preferred stock, and 75% common stock, what is its WACC?
A