QUESTION 21 A firm has determined its cost of each source of capital (before considering tax) and optimal capital structure, which is composed of the following sources and target market value proportions Target Market Proportions (%) 40 Pre-tax cost (%) 6 Source of Capital Long-term debt Preferred slock Common STOCK 10 11 50 5 The firm's marginal tax rate is 40% The weighted average cost of capitalis 6 percent O 733 percent 11 percent 15 percent 05.04 percent