The Tyler Oil Company's capital structure is as follows:

Debt..........................................................35%
Preferred stock .... .. ........ . . . .. .. . ....... .15
Common equity........................................50
The aftertax cost of debt is 7 percent; the cost of preferred stock is 10 percent; and the cost of common equity (in the form of retained earnings) is 13 percent. Calculate Tyler Oil Company's weighted average cost of capital in a manner similar to Table 11-1.

Table 11.1

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Cost Weighted (after tax) Weights cost 1.97% 1.09 6.55% к, 10.94 30% 10 Debt.. Preferred stock. Common equity (retained earnings) Weighted average cost of capital ... к 12.00 к. к, 60 7.20 10.26%