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Petra Company is financed by $3 million in debt, $1 million in preferred stocks, and $6 million in common stocks. The pre-tax cost of
Petra Company is financed by $3 million in debt, $1 million in preferred stocks, and $6 million in common stocks. The pre-tax cost of debt is 4%, the cost of preferred stock is 6%, and the cost of equity is 14%. Calculate the weighted average cost of capital. Assume 21% tax rate. 6.25% O 8.42% O 7.64% 9.95%
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