If Cold Duck is subject to a tax rate of 40%, Cold Duck Brewing Companys WACC is___________________. (Round your answer to two decimal places.)

Answer Options: 7.48%, 8.47%, 9.97%, 11.47%

The case of Cold Duck Brewing Company The CFO of Cold Duck Brewing Company is trying to determine the company's WACC. He has determined that the company's before-tax cost of is 9.60%. The company currently has $750,000 of debt, and the CFO believes that the book value of the company's debt is a good approximation for market value of the company's debt. - The firm's cost of preferred stock is 10.70%, and the book value of preferred stock is $45,000. - Its cost of equity is 13.50%, and the company currently has $500,000 of common equity on its balance sheet. - The CFO has estimated that the firm's market value of preferred stock is $78,000, and the market value of its common equity is $880,000 If Cold Duck is subject to a tax rate of 40%, Cold Duck Brewing Company's WACC is (Hint: Round your answer to two decimal places.)