The Classic Car Co. has a before-tax cost of debt capital of 9%, a cost of preferred stock of 10%, a cost of equity capital of 14%, and a marginal tax rate of 40%.The market values of its debt, preferred stock and common stock are S40 million, $20 million, and S60 million respectively. Therefore, for evaluating average risk projects, the manager should use a discount rate of. (Do not round intermediate calculations. Round final answer to two decimal places.) 14.47%. 12.37%. 9.27%. 10.47%