Droz's Hiking Gear, Inc. has found that its common equity capital shares have a beta equal to 1.7 while the risk -free return is 8 percent and the expected return on the market is 14 percent. It has 8 years semi-annual maturity bonds outstanding with a price of $ 767.03 that have a coupon rate of 8 percent. The firm is financed with $ 120,000,000 of common shares (market value) and $ 80,000,000 of debt. What is the after tax weighted average cost of capital for Droz's, if it is subject to a 40 percent marginal tax rate? Round your final percentage answer to two decimal places)

A) 11.88 %

B) 13.32%

C) 11.76%

D) 13.98%

SHOW CALCULATION WITH FINANCIAL FORMULAS. "DO NOT USE FINANCIAL CALCULATOR OR EXCELL TO SOLVE IT"