Quakers Inc. has a before-tax cost of debt of 4%, a cost of equity of 13%, and a cost of preferred stock of 6%. The market value of common stock is $2.08 million. The market value of debt is 0.51 million. The market value of preferred stock is 1.36 million. The tax rate is 34%. What is the weighted average cost of capital for Quakers Inc.? 8.14% O 8.54% ○ 9.25% ○ 9.84%

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Q: t

A: Calculation of the firm’s KO (cost of capital) is shown below: Hence, the option first is correct.

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