Weighted it Average Cost of Capital 9-20. Great Expectations, a wedding and maternity clothing manufacturer, has a cost of equity of 16 percent and a cost of preferred stock of 14 percent. Its before-tax cost of debt is 12 percent, and its marginal tax rate is 40 percent. Assume that the most recent balance sheet shown here reects the optimal capital structure. Calculate Great Expectations' after-tax WACC. Great Expectations Balance Sheet Dec. 31, 2012 Assets Liabilities and Equity lflash $ 50.000 Accounts Receivable 90.000 Long-Term Debt $ 600,000 Inventories 300.000 Preferred Stock 250.000 Plant and Equipment. net 810.000 lCommon Stock 400,000 Total Assets $ 1,250,000 Total Liabilities and Equity $ 1.250.000