PAW Industries Has 5 Million Shares of Common Stock Outstanding

Multiple Choice

PAW Industries has 5 million shares of common stock outstanding with a market price of $8.00 per share.The company also has outstanding preferred stock with a market value of $10 million,and 100,000 bonds outstanding,each with face value $1,000 and selling at 96 percent of par value.The cost of equity is 19 percent,the cost of preferred is 15 percent,and the cost of debt is 9 percent.If PAW's tax rate is 34 percent,what is the WACC?

A) 10.14 percent
B) 10.38 percent
C) 12.51 percent
D) 14.33 percent