Debreu Beverages has an optimal capital structure that is 60% common equity, 30% debt, and 10% preferred stock. Debreu's cost of equity is 10%. Its cost of preferred equity is 5%, and its pretax cost of debt is 6%. If the corporate tax rate is 30%, what is the weighed average cost of capital?

8.76%

7.76%

6.76

5.76