Feast Inc. plans to maintain its optimal capital structure of 40% debt, 10% preferred stock, and 50% common equity indefinitely. The pre-tax required return on each component source of capital is as follows: debt 8%; preferred stock 12%; common equity 16%. Assuming a 40% marginal tax rate, what after-tax weighted average cost of capital can we infer for the firm?

12.00%

11.12%

10.64%

12.40%