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

Given the following information:

Percent of capital structure:

Preferred stock	25	%
Common equity	55
Debt	20

Additional information:

Corporate tax rate		35	%
Dividend, preferred	$	4.00
Dividend, expected common	$	2.80
Price, preferred	$	99.00
Growth rate		5	%
Bond yield		7	%
Flotation cost, preferred	$	6.40
Price, common	$	92.00

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.)