Ch11. 6. The calculation of a weighted average cost of capital (WACC) involves calculating the weighted average of the required rates of return on debt and equity, where the weights equal the percentage of each type of financing in the firms overall capital structure.

______ is the symbol that represents the cost of preferred stock in the weighted average cost of capital (WACC) equation.

Felix Co. has $2.82 million of debt, $1.6 million of preferred stock, and $1.51 million of common equity. What would be its weight on debt?

a. 24.28%

b. 47.55%

c. 21.58%

d. 29.68%