Answer this question based on the following data for a global firm.

• average pretax cost of debt = 8%
• average cost of equity = 13.6%
• average tax rate = 40%
• the firm raises funds by borrowing 20 million dollars and issuing equity in the amount of 30 million dollars.

The after-tax weighted average cost of capital of this firm is:

1. 10.08%
2. none of the answers in this question are correct
3. 4.8%
4. 13.60%
5. 11.36%

Please be aware they are asking for after-tax not before