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You have estimated the after-tax cost of debt to be 5.4%, the cost of preferred to be 6.7% and the cost of common to be
You have estimated the after-tax cost of debt to be 5.4%, the cost of preferred to be 6.7% and the cost of common to be 8.6%. Your firm obtains 30% of its financing from long-term debt, 20% of its financing from preferred stock and 50% of its financing from common stock. Calculate the firms cost of capital.
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