Question: PLEASE EXPLAIN THE FORMULA AND SOLVE. Consider a company financed with 0.7 equity, 0.0 preferred stock, and the remaining debt subject to a corporate tax

PLEASE EXPLAIN THE FORMULA AND SOLVE.

Consider a company financed with 0.7 equity, 0.0 preferred stock, and the remaining debt subject to a corporate tax rate 0.5 If the required rate of return on the debt is 0.04, on the preferred stock is 0.08 and on the common stock is 0.16, what is the working average cost of capital for this company?

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