1. Automaton, Inc.'s capital structure includes debt, preferred stock and equity. The market value of its preferred stock is $55 million. The book and market values of its debt outstanding are $100 million and $200 million, respectively. Automaton has 5 million shares of common stock outstanding with a current market price of $73 per share. Its book value of equity is $189 million. You also have the following information: Cost of Preferred stock = 11.5%; Cost of Debt = 7%; Cost of Equity = 16%; and Tax Rate = 35%. What is Automaton's WACC?

   		7.0%
   		16.0%
   		11.91%
   		6.6%