Calculate the weighted average cost of capital on the basis

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Calculate the weighted average cost of capital on the basis of Historical Market Value Weights for:

Long-term debt = 30%

Preferred stock= 15%

Common stock equity = 55%

Cost of debt =7.2%

Cost of preferred stock = 13.5%

cost of retained earnings = 16%

Cost of common stock = 18%

Company's debt represents 25%, preferred stock 10%, common stock equity represents 65% of total capital.

Reference no: EM13575222

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