Weighted average cost of capital McDonough Corporation is financed 25% by debt with a pretax cost of 8%, 20% by preferred shares with a pretax cost of 12%, 35% by common equity with a pretax cost of 16%, and 20% by retained earnings with an estimated pretax cost of 14%. McDonough Corporation's marginal tax rate is 40%. Calculate McDonough's weighted average cost of capital.
LO 4