17. LMN Ltd is considering a project fro the coming year, which will cost $50 million. LMN Ltd plans to use the following combination of debt and equity to finance the investment -Issue 15 million of 20 year bonds at a price of 101, with a coupon rate of 8 percent, and flotation costs of 2 percent of par -Use 35 million of funds generated from (retained) earnings. The equity market is expected to earn 12%. Bo treasury bonds are currently yielding 5%. The beta coefficient of L.MN Ltd is estimated to be 0.60. LMN Ltd is subject to an effective corporate income tax rate of 40 percent. Assume that after-tax cost of debt is 7% and the cost of equity is 12%. Determine the weighted average cost of capital Required: Compute LMN Ltd's expected rate of return using the Capital Asset Pricing Model (CAPM). A. 12.20 percent B. 9.20 percent C. 7.20 percent D. 100 percent