City Rentals has $44,000$ shares of common stock outstanding at a market price of $$32$ a share. The common stock just paid a $$1\mathrm{.}50$ annual dividend and has a dividend growth rate of $2\mathrm{.}5$ percent. There are $7,500$ shares of $$9$ preferred stock outstanding at a market price of $$72$ a share. The outstanding bonds mature in $11$ years, have a total face value of $$825,000,$ a face value per bond of $$1,000,$ a market price of $$989$ each, and a pretax yield to maturity of $8\mathrm{.}3$ percent. The tax rate is $21$ percent. What is the firm's weighted average cost of capital?

Question $3$Answer

a$.$

$7\mathrm{.}76\%$

b$.$

$8\mathrm{.}10\%$

c$.$

$9\mathrm{.}29\%$

d$.$

$9\mathrm{.}97\%$

e$.$

$10\mathrm{.}30\%$