BD Corporation has 8,000,000 shares of common stock outstanding, 800,000 shares of preferred stock outstanding and 187,500 bonds outstanding. The common stock currently sells for $37.50 and just paid a dividend today of $2.00 per share and is expected to grow at a constant rate of 10%. The preferred stock currently sells for $62.50 per share and pays a dividend of $4.00. The bonds have a coupon of 7%, compounding semiannually, 15 years to maturity and sells for $800. BD Corp. has a tax rate of 34%. Calculate the weighted average cost of capital (WACC).

You will use this WACC rate for the upcoming NPV calculation for BD Corporation.

a. 11.7676%

b. 11.9076%

c. 12.0476%

d. 12.0376%