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The expected return on the market is 1 2 . 7 5 % , the risk - free rate is 4 . 2 6 %

The expected return on the market is 12.75%, the risk-free rate is 4.26%, and the tax rate is 25.00%. Semper Fun Sports has 300,000 common shares outstanding that are priced at $42.20 per share and have an expected return of 16.58% and an expected real return of 14.53%. Last year, Semper Fun Sports common stock had a return of 11.44%. The company also has 400,000 shares of preferred stock outstanding that are priced at $15.93 per share and have an expected return of 13.58% and an expected real return of 11.09%. Last year, Semper Fun Sports preferred stock had a return of 8.47%. Finally, the company has 10,000 bonds outstanding with a coupon rate of 9.76%, yield-to-maturity of 4.48%, current yield of 8.76%, face value of $1,000.00, and price of $1,260.00. What is the weighted average cost of capital for Semper Fun Sports?
11.99%(plus or minus 0.02 percent)
10.67%(plus or minus 0.02 percent)
10.71%(plus or minus 0.02 percent)
11.16%(plus or minus 0.02 percent)
None of the above is within .02 percentage points of the correct answer

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