Several years ago, a major automotive manufacturer was sued because the latch on a minivan's rear door failed after the vehicle was hit from the side at 30 miles per hour. the plaintiff argued that the latch was of poor quality because it didn't hold up under the stress. the manufacturer disagreed, noting that the latch had met all government requirements and had been made to specifications. according to our definition of quality, can both sides be right?

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?