Farmers Equipment has 100,000 shares of common stock outstanding at a market price of $50 a share and a market beta of 0.5. Market return is 14% and risk-free rate is 4%. The outstanding bond issue of the company has a face value of $2,000,000 and a market price of $1,200. The maturity of the bonds is 10 years and coupon rate is 9%. Coupons are paid semi-annually. In addition, there are 25,000 shares of preferred stock outstanding at a market price of $40 a share. The cost of preferred stock of 8 percent. The company's tax rate is 40 percent. What is the weighted average cost of capital of Farmers Equipment?

A. 8.68%

B. 8.21%

C. 7.39%

D. 7.57%

E. None of the above