Problem:
The target capital structure for QM Industries is 39% common stock, 5% preferred stock, and 56% debt. If the cost of common equity for the firm is 18.8%, the cost of preferred stock is 9.7%, the before tax cost of debts is 7.5%, and the firm's tax rate is 35%.
Required:
Question: What is QM's weighted average cost of capital?
Note: Please show how you came up with the solution.