A company is planning a $90 million expansion. The expansion is to be financed by selling $40 million in new debt and $50 million in new common stock. The before-tax required return on debt is 8 percent and 15 percent for equity. If the company is in the 21 percent tax bracket, what is the company's marginal weighted average cost of capital? I A. 9.0%. B. 10.0%. C. 10.6%. D. 11.2%.
