Bergen Express has a target capital structure of 35% debt, 45% equity and 20% preferred stock. The firm's before-tax cost of debt is 7%. The preferred stock pays a $2.50 annual dividend with a par value of $22, a market price of $26 and floatation costs of $2 per share. The firm will raise common equity through retained earnings. Management estimates the cost of internal equity to be 6% higher than the before-tax cost of debt. The risk-free rate is 4 percent and the tax rate is 25%. What is the WACC? O 7.54% O 6.69% O 8.16% O 7.71% 0 7.28%