You are given the following information for Golden Fleece Financial:

Long-term debt outstanding: $300,000 Current yield to maturity (r debt): 8%

Number of shares of common stock: 10,000 Price per share: $50 Book value per share: $25 Expected rate of return on stock (r equity): 15%

Calculate Golden Fleece’s company cost of capital. Ignore taxes.

AppendixLO1