Emerson Electric Company desires to finance all projects with funds acquired according to their target capital structure of 35% debt and 65% equity. Emerson Electric can issue debt at a before-tax cost of 8.0% indefinitely, has $26,000,000 of retained earnings at a cost of 11.5%, and can issue new common stock at a cost of 13.5%. Emerson Electrics marginal tax rate is 32%. What is Emerson Electrics second weighted average cost of capital (after the cheapest sources of funds are exhausted)?

A.11.58%

B.11.25%

C.9.38%

D.10.28%

E.10.68%