WACC.

Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow

$1,882

from Wendy, who will charge him

4%

on the loan. He will also borrow

$1,248

from Bebe, who will charge him

6%

on the loan, and

$870

from Shelly, who will charge him

12%

on the loan. What is the weighted average cost of capital for Eric?