An Analyst Has Obtained the Following Information About Maudite Brewers $\bullet$

An analyst has obtained the following information about Maudite Brewers Co.:
$\bullet$ Book value of assets $25,000
$\bullet$ Book value of common equity $10,000, with 4,000 shares outstanding, currently trading at $5 per share
$\bullet$ Book value of preferred shares $5,000, with 3,000 preferred shares outstanding which are currently trading at $2 per share.
$\bullet$ The yield on the debt equals the coupon rate.
The weights used to determine the weighted average cost of capital are:
Common Equity: Preferred Equity: Debt:

A) 55.56% 16.67% 27.77%
B) 40% 20% 40%
C) 80% 10% 10%
D) Cannot be determined because we need the market value of debt.