Question $19$

A business plans to use $20\%$ debt, $10\%$ preferred stock, and $70\%$ common stock in its capital budget.

The pretax cost of the components are $9\%$ for debt, $8\%$ for preferred stock, and $14\%$ for common stock.

The business's tax rate is $20\%.$

What is their WACC?

$12\mathrm{.}44\%$

$12\mathrm{.}40\%$

$9\mathrm{.}92\%$

$10\mathrm{.}4\%$