What is the weighted average cost of capital

Reference no: EM13289332

Debreu Beverages has an optimal capital structure that is 70% common equity , 20% 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 5%. If the corporate tax is 35%, what is the weighted average cost of capital?

Reference no: EM13289332

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