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Homemade Flying Machines has a capital structure of 23% debt, 10% preferred stock and 67% common stock. The pre-tax cost of debt is 5.5%, the
Homemade Flying Machines has a capital structure of 23% debt, 10% preferred stock and 67% common stock. The pre-tax cost of debt is 5.5%, the cost of preferred stock is 8% and the cost of equity is 9%. The firm's marginal tax rate is 21%. What is the company's weighted average cost of capital?
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