What is weighted average cost of capital for project

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Reference no: EM131856917

GHJ Inc. is investing in a major capital budgeting project that will require the expenditure of $16 million. The money will be raised by issuing $2 million of bonds, $4 million of preferred stock, and $10 million of common stock. The company estimates is after-tax cost of debt to be 7%, its cost of preferred stock to be 9%, and the cost of common stock to be 17%. What is the weighted average cost of capital for this project?

Reference no: EM131856917

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