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A friend is trying to determine their company's weighted average cost of capital but is really not sure. You have been advised that the cost
A friend is trying to determine their company's weighted average cost of capital but is really not sure. You have been advised that the cost of ordinary equity is 17%, preference shares are 8% and the pre-tax cost of debt is 5%. The weight of preference shares is 15% and debt is 45%. The tax rate is 25%. Calculate the after-tax Weighted Average Cost of Capital (WACC). (3 Marks) Please answer as a decimal to 4 decimal places.
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