Question $6$

The market value of a company's equity is $$2\mathrm{.}08$ million, the market value of a company's

debt is $$0\mathrm{.}51$ million, and the market value of preferred stock is $$1\mathrm{.}36$ million. The before$-$

tax cost of debt is $7\%,$ a cost of equity is $11\%,$ and a cost of preferred stock is $8\%.$ The tax

rate is $34\%.$ What is the weighted average cost of capital?

$6\mathrm{.}14\%$

$6\mathrm{.}54\%$

$8\mathrm{.}60\%$

$9\mathrm{.}14\%$

$9\mathrm{.}45\%$