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Nipigon Manufacturing has a cost of debt of 7 %, a cost of equity of 12%, and a cost of preferred stock of 9%. Nipigon
Nipigon Manufacturing has a cost of debt of 7 %, a cost of equity of 12%, and a cost of preferred stock of 9%. Nipigon currently has 130,000 shares of common stock outstanding at a market price of $25 per share. There are 48,000 shares of preferred stock outstanding at a market price of $38 a share. The bond issue has a face value of $950,000 and a market quote of 104. The company's tax rate is 35%.
Required:
1. Calculate the weighted average cost of capital for Nipigon.
Please show and clearly label all calculations, thank you.
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