Consider the following information for Watson Power Co.:

Debt: 3,000 8.5 percent coupon bonds outstanding, $1,000 par value, 21 years to maturity, selling for 103 percent of par; the bonds make semiannual payments.

Common stock: 63,000 shares outstanding, selling for $61 per share; the beta is 1.19.

Preferred stock: 95,000 shares of 7 percent preferred stock outstanding, currently selling for $106 per share.

Market: 9 percent market risk premium and 6 percent risk-free rate.

Assume the company's tax rate is 33 percent.

Find the WACC.

A. 11.46%

B. 10.96%

C. 11.19%

D. 11.06%

E. 12.12%