Consider the following capital structure for ABC Corporation. The company has a floating-rate bank loan, preferred shares, and common equity in its capital structure. The firm's tax rate is 21%. The risk-free rate is 3% Details on the components of the capital structure are listed below, Debt: Short-term, variable-rate bank loan $120 million par Remaining maturity of 2 years Bond's rate was recently reset to market yield of 5% So, now priced at par (market value $120 million) Preferred equity: $100 million par L 6% annual coupon Each $1,000 par issue is currently priced at $1,050 Common equity: 5 million shares outstanding Current share price: $50 Stock beta: 1.9 Market risk premium-7.0% Using CAPM what is ABC's cost of common equity? 8.90% 10.00% 14.20% 16308