Based on the information below, calculate the weighted average cost of capital. Great Corporation has the following capital situation.
Debt: One thousand bonds were issued five years ago at a coupon rate
of 11%. They had 20-year terms and $1,000 face values. They are now
selling to yield 9%. The tax rate is 37% Preferred stock: Two
thousand shares of preferred are outstanding, each of which pays an
annual dividend of $7.50. They originally sold to yield 15% of their
$50 face value. They’re now selling to yield 11%. Equity: Great
Corp has 108,000 shares of common stock outstanding, currently selling
at $18.48 per share. Use the risk premium approach and assume a 3% risk

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