Problem:
The Black Bird Company plans a $45 million expansion. The expansion is to be financed by selling $35 million in new debt and $10 million in new common stock. The before-tax required rate of return on debt is 7% percent and the required rate of return on equity is 20% percent.
Required:
Question: If the company is in the 34 percent tax bracket, what is the weighted average cost of capital?
Note: Please provide full description.