A firm currently has the following capital structure which it intends to maintain. Debt: $3,000,000 par value of 9% bonds outstanding with an annual before-tax yield to maturity of 7.67% on a new issue. The bonds currently sell for $1,150 each for a total market value of $3,450,000. Common stock: 46,000 shares outstanding currently selling for $50 per share. The firm expects to pay a $5.50 dividend per share one year from now and is experiencing a 3.67% growth rate in dividends, which it expects to continue indefinitely. The firm's marginal tax rate is 40%. The company has no plans to issue new securities. The firm's weighted average cost of capital is:

A. 0.0897

B. 0.0863

C. 0.1071

D. 0.1047