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Estimate of the company weighted average cost of capital

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Question - Using the following financial data, what is your estimate of the company's weighted average cost of capital?

Book Value of Debt $6,000,000

Book Value of Preferred Stock $2,000,000

Book Value of Common Equity $8,000,000

Market Value of Common Equity $12,000,000

Cost of Debt Before Tax 5.6%

Cost of Debt After Tax 4.4%

Cost of Preferred Stock 7.5%

Cost of Common Equity 9.9%

A. 7.54%

B. 8.01%

C. 8.61%

D. 8.21%

Reference no: EM133025869

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