Global Technology's capital structure is as follows:

Debt	15	%
Preferred stock	50
common equity	35

The after-tax cost of debt is 8.50 percent; the cost of preferred shares is 12.50 percent; and the cost of common equity (in the form of retained earnings) is 15.50 percent.

Calculate the overall weighted cost of technology for each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places.)

	weighted cost
Debt ( K d )		%
Preferred Stock ( Kp )
Common capital ( K e )
Weighted average cost of capital ( K a )		%

Answer rating: 100% (QA)

To calculate the weighted cost of each source of c... View the full answer