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An Oil Company's capital structure is as follows: Debt 40% Preferred stock 10% Common equity 50% The after-tax cost of debt is 7 percent; the

An Oil Company's capital structure is as follows: Debt 40% Preferred stock 10% Common equity 50% The after-tax cost of debt is 7 percent; the cost of preferred stock is 10 percent; and the cost of common equity (in the form of retained earnings) is 13 percent. Calculate Oil Company's weighted average cost of capital.

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