12 PLEASE USE ONE OF THE FORMULAS PROVIDED

Cost of Common Equity kcs=PcsD1+g Cost of Preferred Equity kps=PpsDivps Cost of Debt After-tax cost of debt = Yield-to-Maturity * (1 - tax rate ) Weighted Average Cost of Capital (WACC) Company Bourbon's book value of capital is as follows: Debt $12,500,000; Pref Stock $12,000,000; Common Stock $25,200,000. The market value of Company Bourbon's capital is: Debt $12,500,000; Pref Stock \$22,500,000; Common Stock \$55,000,000. Company Bourbon's after-tax cost of debt is 5.7%, preferred stock has required return of 7.5% and common stock has a required return of 12.0%. What is Bourbon's weighted average cost of capital? 8.4% 10.0% It can not be determined without knowing the tax rate 11.0%