Table 19.3 shows a simplified balance sheet for Rensselaer Felt. Calculate this company?s weighted-average cost of capital. The debt has just been refinanced at an interest rate of 6 percent (short term) and 8 percent (long term). The expected rate of return on the company?s shares is 15 percent. There are 7.46 million shares outstanding, and the shares are trading at $46. The tax rate is 35 percent.

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Cash and marketable securities Accounts receivable Short-term debt Accounts payable Current liabilities 1,500 120,000 75,600 62,000 137,600 Inventories Current assets 125,000 246,500 Long-term debt Deferred taxes Shareholders' equity 208,600 45,000 Property, plant, and equipment Other assets Total 302,000 89,000 637,500 246,300 637,500 Total