46. Consider the following balance sheet below for a company with a marginal tax rate of 35 percent. The market risk premium is 8 percent, the firm's beta is 1.2 and the risk free rate of return is 4 percent. Assume there are no flotation costs for issuing new equity. Scorpio's Long-term debt and preferred stock are currently trading at par value. The Scorpio Corporation Balance sheet, year ended December 31, 2016 Cash $50,000 Accounts payable Accounts receivable 20,000 Accrued salaries Inventory 130.000 Other accruals Current assets $200,000 Current liabilities Property, plant and equipment 900.000 Long-term debt, 8% coupon Preferred stock, 6% dividend Common stock Retained earnings Total assets $1,100,000 Total liabilities and equity $40,000 15,630 44.350 $100,000 400,000 100,000 300.000 200.000 $1,100,000 The Scorpio Corporation's cost of common equity is closest to: A. 4.8 percent. B. 8.8 percent. C. 13.2 percent D. 13.6 percent. franital and then uses that same cost of capital to evaluate