The following information comes from the Galaxy Construction balance sheet. The value of common stock is $10,000, retained earnings equals $7,000, total common equity equals $17,000, preferred stock has a value of $3,000, and longminusterm debt totals $15,000. If the cost of debt is 8.00%, preferred stock has a cost of 10.00%, common stock has a cost of 12.00%, and the firm has a corporate tax rate of 30%, calculate the firm's WACC adjusted for taxes. A.10.11%B.9.09%C.10.00%D. There is not enough information to answer this question.

The WACC is 9.09% and option B is the correct answer.

Explanation:

The WACC or the weighted average cost of capital is a firm's average cost of its capital structure that comprises of debt, preferred stock and common equity. The formula fro WACC is,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

Total Assets = 17000 + 3000 + 15000 = 35000

Taking out these values in thousands for simplicity.

WACC = 15/35 * 0.08 * (1-0.3)  +  3/35 * 0.1  +  17/35 * 0.12

WACC = 0.09085 or 9.085% rounded off to 9.09%

answer; i believe that (pastoral society) is the correct answer;