Flying High Enterprises has 80,000 bonds outstanding with a yield to maturity of 6.75 percent. The company's common stock has a beta of 1.34, sells for $42 a share, and has 2.5 million shares outstanding. In addition, Flying High also has 750,000 shares of preferred stock which pay a constant $7 annual dividend and sell for $53 a share. The next dividend will be paid in one year.

The risk-free rate is 2.8 percent and the return on the market is 11.2 percent. If the corporate tax rate is 38 percent, what is the firm's weighted average cost of capital?

Options - 10.64%, 11.56%, 10.39%, or 11.18%