Computation of the weighted average cost of capital

Reference no: EM1311049

A firm has determined its cost of each source of capital and optimal capital structure, which is composed of the following sources and target market value proportions:

Source of capital	Target Market Proportions	After - Tax Cost
Long-term debt	40%	6%
Preferred stock	10	11
Common stock equity	50	15

What is the weighted average cost of capital of the firm?

Reference no: EM1311049

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