Question: Need help with Finance Question, read it carefully and check your answer please. Thank you. A firm's current capital structure consists of 50 percent debt

Need help with Finance Question, read it carefully and check your answer please. Thank you.

Need help with Finance Question, read it carefully and check your answer

A firm's current capital structure consists of 50 percent debt and 50 percent common stock. The firm's before-tax cost of debt is 6 percent, its tax rate is 40 percent, and its cost of common stock is 11 percent (based on CAPM). Further, the risk-free rate is 4 percent and that the market risk premium is 5 percent. Calculate the firm's new weighted average cost of capital if it changes to a capital structure of 25 percent debt and the balance is equity. 7.6225% 7.8375% 7.7300% 7.9450% 7.5150%

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