Question: Eric has another get rich quick idea but needs funding to support
Eric has another get-rich-quick idea but needs funding to support it. He chooses an all-debt funding scenario. Eric will borrow $2,000 from Wendy, who will charge Eric 6% on the loan. He will also borrow $1,500 from Bebe, who will charge 8% on the loan and $800 from Shelly, who will charge 14% on the loan. What is the weighted average cost of capital for Eric?
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