Answer:
Cost of capital = 12.40%
Explanation:
given data 
cost of equity = 15.4 percent 
pretax cost of debt = 8.9 percent
debt-equity ratio = 0.46 
tax rate = 34 percent
to find out
What is the cost of capital for this project
solution
first we get Equity multiplier that is express as 
Equity multiplier = 1 + debt-equity ratio  ..................1
put here value 
Equity multiplier = 1 + 0.46
Equity multiplier = 1.46
and 
Weight of equity will be 
Weight of equity =  ....................2
    ....................2
put here value 
Weight of equity = 
Weight of equity =  0.6849
and
Weight of Debt will be here 
Weight of Debt = 1 -  weight of equity    ...........................3
put here value 
Weight of Debt =  1 - 0.6849
Weight of Debt =   0.3151
so 
Cost of capital will be here as 
Cost of capital = Weight of Debt  × pretax cost of debt ×  (1- tax rate )  + cost of equity ×  Weight of equity    .....................4
put here value we get     
Cost of capital = 0.3151 × 8.9% × (1 - 0.34) + 15.4% × 0.6849
Cost of capital = 12.40%