*Debt: 6,000 of 8 percent coupon bonds outstanding, $1,000 par value, 10 years to maturity, selling for 108 percent of par; the bonds make annual payments.

*Preferred stock: 8000 shares of 7.2% preferred stock dividend rate selling at $90 per share. *Common stock: 500,000 shares outstanding, selling for $70 per share; the beta is 1.12.

*Market data: 10 percent market rate of return and 5 percent risk-free rate, and the corporate tax rate of 30%.

What is the before-tax rate of this company?

Group of answer choices

a. 30%

b. 21%

c. 130%

d. 70%