A company needs to purchase equipment for a project with total cost of $2 million. It is estimated that the after-tax cash inflows from the project will be $210,000 annually in perpetuity. The company has a debt-to-assets ratio of 41.10% using market values. The firm's cost of equity is 13.75%, its pre-tax cost of debt is 8.75%, and the flotation costs of debt and equity are 4.05% and 9.85%, respectively. The tax rate is 34%. Assume the project is of similar risk to the firm's existing operations. What is the weighted average flotation cost for the company? 7.09% 7.28% 7.47% 7.65% 7.84%