What is the weighed average cost of capital

Reference no: EM13288705

Debreu Beverages has an optimal capital structure that is 70% common equity, 10% debt, and 10% preferred stock. Debreu's pretax cost of equity is 9%. Its pretax cost of preferred equity is 7%, and its pretax cost of debt is also 5%. If the corporate tax is 35%, what is the weighed average cost of capital? Please show all work.

Reference no: EM13288705

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