WACC.

Eric has another get-rich-quick idea, but needs funding to support it. He chooses an all-debt funding scenario. He will borrow

$3,499

from Wendy, who will charge him

5%

on the loan. He will also borrow

$2,325

from Bebe, who will charge him

7%

on the loan, and

$1,176

from Shelly, who will charge him

13%

on the loan. What is the weighted average cost of capital for Eric?