The company has a marginal tax rate if 40 percent. a study of publicly held companies in this line of business suggests that the required return on equity is about 17 percent. The company's debt is currently yielding 13 percent and its preferred stock is yielding 12 percent. Compute the firms present weighted average cost of capital.
Debentures: 6,000,000
Preferred Stock: 2,000,000
Common Stock (320,000 shares): 8,000,000
Total: 16,000,000