Consider the following data towards a firm's potential leverage. Assume that the firm can lever up in increments of 10% of firm value upto 60% debt in the capital mix. Further assume that the CAPM holds. How much debt should the firm use to minimize its financing cost? Corporate Income tax rate 45% Asset beta 1.2 Treasury instrument rate 6% Expected return on market portfolio 10% Debt/Value Credit rating for the debt Credit spread 0% AAA 2% 10% AA 4% 20% A 6% 30% A- 8% 40% BAA 10% 50% BBA 14% 60% BBB 20% >60% Junk Credit not available 30% 60% 0% 50% 20% 40% 10% >60% Consider the data in this section (Section Leverage). What is the firm's cost of financing at the optimal leverage level? (select the option closest to the answer) 12.00% 10.16% 10.8% 10.49% 11.05% 9.21% 3 points