Answer:
11.48%
Explanation:
The computation of the entity’s weighted-average cost of capital is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
= (0.4 × 8%) × ( 1 - 35%) + (0.20 × 13%) + (0.40 × 17%)
= 2.08% + 2.6% + 6.8%
= 11.48%
Simply we multiplied the weighatge with each capital structure
