I need an answer ASAP!Thanks
Reactive Industries has the following capital structure,Its corporate
tax rate is 35 percent. What is its WACC?
security       market value     required rate of return

debt           20 million       6%
preferred stock  10 million      8%
common stock    50 million       12%

Hi!!

If we call:
w_d = weight of debt = $20 mill/$80 mill = 0.250
w_s = weight of common stocks = $50 mill/$80 mill = 0.625
w_p = weight of preferred stocks = $10 mill/$80 mill = 0.125
K_d = cost of debt 
K_s = cost of stocks (rate of return)
K_p = cost of preferred stocks

the WACC is:
WACC = w_d*K_d*(1-Tax) + w_s*K_s + w_p*K_p =
     = 0.250*0.06*(1-0.35) + 0.625*0.12 + 0.125*0.08 =
     = 0,00975 + 0,075 + 0.01 =
     = 0,09475 = 9.475%

The Reactive Industries' WACC is 9.475% .


I hope that this helps you. Do not hesitate to request for a
clarification if you need it.

Best regards.
livioflores-ga

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