Question: Question 5 Builtrite's target capital structure is 40% common stock, 20%preferred stock and 40% debt. If the cost of commonis 16%, the cost ofpreferred stock

Question 5

Builtrite's target capital structure is 40% common stock, 20%preferred stock and 40% debt. If the cost of commonis 16%, the cost ofpreferred stock is 12% and the before tax cost of debt is 6% (the tax rateis 34%), what is Builtrite's weighted average cost of capital?

Group of answer choices

10.35%

8.32%

11.20%

10.38%

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