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Debreu Beverages has an optimal capital structure that is 50% common equity, 40% debt, and 10% preferred stock. Debreu's cost of equity is 12%. It's
Debreu Beverages has an optimal capital structure that is 50% common equity, 40% debt, and 10% preferred stock. Debreu's cost of equity is 12%. It's cost of preferred equity is 7%, and it's pretax cost of debt is 7%. If the corporate tax rate is 35%, what is the weighed average cost of capital?
Select one:
A. 7.48%
B. 8.52%
C. 9.10%
D. 10.24%
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