Ie 11-2 as/ad model assume the fed’s contraction of the money supply is successful in moving this economy from the price level of $2.34 back to the $2.00 level. there is a cost of this choice by the fed in terms of as 2 million people lose their jobs through no fault of their own. there will also now be a major uncertainty (overall benefits maybe less than originally thought) regarding future ..

Western electric has 32,000 shares of common stock outstanding at a price per share of $79 and a rate of return of 13.00 percent. the firm has 7,300 shares of 7.80 percent preferred stock outstanding at a price of $95.00 per share. the preferred stock has a par value of $100. the outstanding debt has a total face value of $404,000 and currently sells for 111 percent of face. the yield to maturity on the debt is 8.08 percent. what is the firm's weighted average cost of capital if the tax rate is 39 percent?