Global Technology's capital structure is as follows:
Debt = 40%
Preferred stock =15%
Common equity = 45%
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 in a manner similar to Table 11-1 on page 313.
The solution explains how to calculate the weighted average cost of capital