Problem 11-23 Weighted average cost of capital [LO11-1]

Given the following information:

Percent of capital structure:

Preferred stock	30	%
Common equity	50
Debt	20

Additional information:

Corporate tax rate		40	%
Dividend, preferred	$	8.00
Dividend, expected common	$	3.50
Price, preferred	$	103.00
Growth rate		8	%
Bond yield		9	%
Flotation cost, preferred	$	7.20
Price, common	$	78.00

Calculate the weighted average cost of capital for Digital Processing Inc. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)