A company plans to invest 10 million in an expansion project, financing it with 10 million of new bank loans costing 5%. Over the long run, the company plans to maintain its present capital structure of 60% equity and 40% debt. The current cost of equity is 11%. Assuming a tax rate of 19%, the correct discount rate to use for analysis of the expansion project is?

A. 4.1%

B. 5.0%

C. 7.5%

D. 11.0%

E. 8.2%