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Given the following information on S & G Inc.'s capital structure, compute the company's weighted...

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Finance

Given the following information on S & G Inc.'s capital structure, compute the company's weighted average cost of capital.

Type of Capital / Percent of Capital Structure / BeforeTax Component Cost

Bonds 40% 7.5%

Preferred Stock 5% 11%

Common Stock (Internal Only) 55% 15%

The company's marginal tax rate is 40%.

A. 13.3% B. 10.6% C. 10% D. 7.1%

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