QUESTION $5$

A venture has raised $$4,000$ of debt and $$6,000$ of equity to finance its firm. Its cost of borrowing is $7\%,$ its tax rate is $40\%,$ and its cost of equity capital is $10\%.$ What is the venture's weighted average cost of capital $($with rounding$)?$

$8\mathrm{.}0\%$

$7\mathrm{.}4\%$

$7\mathrm{.}7\%$

$6\mathrm{.}2\%$

$9\mathrm{.}6\%$