An investment banking firm has estimated the following after-tax cost of debt and cost of equity for Marquez Luxury Travel Tours.

Proportion of DebtAfter-tax Cost of DebtCost of Equity

30%3.5%10.5%

40%3.8%11.3%

50%5.0%12.9%

60%7.2%14.5%

What is the cost of capital at Marquez optimal capital structure given the above information?

8.95%

8.40%

8.30%

8.15%