Weighted average cost of capital American Exploration, Inc., a natural gas producer, is trying to decide whether to revise its target capital structure. Currently it targets a 50 -50 mix of debt and equity, but it is considering a target capital structure with 70 % debt. American Exploration currently has 6 % after-tax cost of debt and a 12 % cost of common stock. The company does not have any preferred stock outstanding. What is American Explorations current WACC?
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