Table 19.4 shows a simplified balance sheet for Rensselaer Felt. Calculate this company’s weighted-average cost of capital. The debt has just been refinanced at an interest rate of 6%

(short term) and 8% (long term). The expected rate of return on the company’s shares is 15%. There are 7.46 million shares outstanding, and the shares are trading at $46. The tax rate is 35%.

AppendixLO1