Bleakly Enterprises Has a Capital Structure of 55 Percent Common

Bleakly Enterprises has a capital structure of 55 percent common stock, 10 percent preferred stock, and 35 percent debt. The flotation costs are 4.5 percent for debt, 7 percent for preferred stock, and 9.5 percent for common stock. The corporate tax rate is 34 percent. What is the weighted average flotation cost?

A) 5.8 percent
B) 6.2 percent
C) 6.7 percent
D) 7.0 percent
E) 7.5 percent