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Suppose a firm raises $27 million dollars by issuing debt at a cost of 5.7%, raises $13 million by issuing common stock at a cost
Suppose a firm raises $27 million dollars by issuing debt at a cost of 5.7%, raises $13 million by issuing common stock at a cost of 8.7% and raises an additional $8 million by issuing preferred stock at a cost of 11%. What is the average cost of capital per dollar raised (this is similar to the concept of weighted average cost of capital in your finance classes)?
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