Design Interiors has a cost of equity of 18.6 percent and a pretax cost of debt  of 9.7 percent. The firm's target weighted average cost of capital is 12 percent  and its tax rate is 35 percent. What is the firm's target debt-equity ratio? 

(A) 0.81  

(B) 0.87  

(C) 0.98  

(D) 1.02  

(E) 1.16