Question 6 (2 points)

XYZ has a capital structure of 40% debt, 60% equity, and no preferred stock. The firm can issue new bonds at a pre-tax cost of 8%, and new stock at a cost of 14%. XYZ's tax rate is 50%. Compute the weighted average cost of capital (show your answer in percent (without percent sign) and to one decimal place. example: 9.6%).

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