11. Adopted Capital Structure and Cost of Capital

As discussed above, we impute a capital structure of 30% long term debt, 3% preferred stock, and 67% equity for Great Oaks, adopt a long term debt forecast of 7.50%, and adopt a return on equity of 10.20%, consistent with the return found reasonable for the other Class A water companies in recent proceedings. These determinations result in a 9.26% cost of capital for Great Oaks for 2010, as shown below in Table 1.

Table 1 Adopted 2010 Cost of Capital
Long Term Debt	30%	7.50%	2.25%
Preferred Stock	3%	6.00%	0.18%
Equity	67%	10.20%	6.83%
Total			9.26%