A firm has a capital structure with $100 million in equity and $100 million of debt. The cost of equity capital is 14% and the pretax cost of debt is 8%. If the marginal tax rate of the firm is 30%, compute the weighted average cost of capital of the firm.

A)

9.8%

B)

10.3%

C)

11.1%

D)

11.7%

E)

12.1%