Question: Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow $2,849 from Wendy, who will

Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow $2,849

from Wendy, who will charge him 4%

on the loan. He will also borrow $2,294

from Bebe, who will charge him 6%

on the loan, and $857

from Shelly, who will charge him 12%

on the loan. What is the weighted average cost of capital for Eric?

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