A company has determined that its optimal capital structure consists of 40% debt and 60% equity. The before tax cost of debt is 10%; the tax rate is 40%. The costs of retained earnings and new common shares are 8.00% and 9.41%, respectively. Net income is expected to be $40,000. and the dividend payout ratio is 50%. When the firm's capital budget is$0,000, its weighted average cost of capital is: a. 7.20%. b. 8.05%. c. 11.81%. d. 13.69%. e. 14.28%.