Question: 5. Firm Magic has the current liabilities and equity financing on its balance sheet shown below. The firm has taxable income that puts it in

5. Firm Magic has the current liabilities and equity financing on its balance sheet shown below. The firm has taxable income that puts it in a 35% federal tax bracket, and the state in which it operates levies a 4.7% income tax. Compute the firm's weighted average cost of capital (WACC). Source Short-term loan Long-term loan Retained Earnings Common stock Amount $6,000,000 $21,000,000 $35,000,000 $25,000,000 Interest/ROR 7.5% 4.5% 17.0% 22.0% Proportion 0.07 0.24 0.40 0.29

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