Calculate weighted average cost of capital


Global Technology's capital structure is as follows:

Debt                       35%
Preferred stock        15%
Common equity       50%

The after-tax cost of debt is 6.5 percent; the cost of preferred stock is 10 percent; and the cost of common equity (in the form of retained earnings) is 13.5 percent.

Calculate Global Technology's weighted average cost of capital (WACC).

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Accounting Basics: Calculate weighted average cost of capital
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