Peter's Audio Shop has a cost of debt of 7 %, a cost of equity of 11 %, and a cost of preferred stock of 8 %. The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. There are 40,000 shares of preferred stock outstanding at a market price of $34 a share. The bond issue has a total face value of $500,000 and sells at 102 % of face value. The company's tax rate is 34 %. What is the weighted average cost of capital for Peter's Audio Shop?

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The Answer of Peter's Audio Shop has a cost of debt of 7 %, a cost of equity of 11 %, and a cost of preferred stock of 8 %. The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. There are 40,000 shares of preferred stock outstanding at a market price of $34 a share. The bond issue has a total face value of $500,000 and sells at 102 % of face value. The company's tax rate is 34 %. What is the weighted average cost of capital for Peter's Audio Shop?

Peter's Audio Shop Has a Cost of Debt of 7