Debreu Beverages has an optimal capital structure that is 60% common equity, 25% preferred stock, and 15% debt. Debreu's pretax cost of equity is 11%. Its pretax cost of preferred equity is 7%, and its pretax cost of debt is 7.5%. If the corporate tax rate is 35%, what is the weighted average cost of capital?

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8.98%

7.69%

5.2%

7.67%

8.10%

7.80%

8.74%

8.04%