(Related to Checkpoint 14.1) (Weighted average cost of capital) The target capital structure for QM Industries is

37

percent common stock,

13

percent preferred stock, and

50

percent debt. If the cost of common equity for the firm is

17.9

percent, the cost of preferred stock is

9.8

percent, the before-tax cost of debt is

7.2

percent, and the firm's tax rate is

35

percent, what is QM's weighted average cost of capital?

QM's weighted average cost of capital is

enter your response here%.

(Round to three decimal places.)