CostaCap Corporation's capital structure (market value weights) consists of 50% common stock, 10% preferred stock, and 40% debt. The company's cost of common equity is 8%, it's cost of preferred equity is 5%, and it's pretax cost of debt is 3%. Costacap's tax rate is 25%. What is Costacap's weighted average cost of capital (WACC)? Group of answer choices 4.8% 5.1% 5.4% 5.7%

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Chapter1: Investments: Background And Issues
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CostaCap Corporation's capital structure (market value weights) consists of 50% common stock, 10% preferred stock, and 40% debt.  The company's cost of common equity is 8%, it's cost of preferred equity is 5%, and it's pretax cost of debt is 3%.  Costacap's tax rate is 25%.  What is Costacap's weighted average cost of capital (WACC)?

Group of answer choices
4.8%
5.1%
5.4%
5.7%
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