Allison Engines Corporation has established a target capital structure of 40 percent debt and 60 percent common equity. The current market price of the firms stock is P0=$50.6; its last dividend was D0=$2.3 and its expected dividend growth rate is 6.9 percent. What will Allison's marginal cost of retained earnings, rs, be?

A. 8.66%

B. 9.66%

C. 10.16%

D. 8.16%

E. 9.16%