Question: The capital structure for a corporation is provided below. The company plans to maintain its debt structure in the future. If the firm has a

The capital structure for a corporation is provided below. The company plans to maintain its debt structure in the future.

If the firm has a 5 percent after-tax cost of debt, a 12.5 percent cost of preferred stock, and an 15 percent cost of common stock, what is the firm's weighted average cost of capital?

Captial Structure

Bonds

1055

Preferred stock

255

Common Stock

3500

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