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Investors expect a 10% annual return on Qwert Corporation's preferred stock, and an 18% return on its common stock. Qwert's bonds currently yield 11%. The
Investors expect a 10% annual return on Qwert Corporation's preferred stock, and an 18% return on its common stock. Qwert's bonds currently yield 11%. The total market value of Qwert preferred is $17 million, of common stock is $63 million and of bonds is $20 million. The marginal tax rate is 30%; what is the Qwert's weighted average cost of capital?
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