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Calculate the weighted average cost of capital for a firm with 30% debt, 25% preferred, and...

Calculate the weighted average cost of capital for a firm with 30% debt, 25% preferred, and 45% common equity. The interest rate on new debt is 2%, the yield on the preferred is 6%, the cost of retained earnings is 10%, and the tax rate is 25%.

6. 62%

6.45%

7.33%

8.18%

9.00%
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