A company is trying to determine the cost of capital for a major expansion project. A survey of commercial lenders indicates that cost of debt is currently 8% based on the company's debt ratio of 40%. The company complies with this requirement and has determined that a stock issuance would require a 10% return in order to attract investors.

Which of the following is the company's cost of capital?

A) 8.8%

B) 9.2%

C) 10.6%

D) 18.0%