Given the following information on S & G Inc.'s capital structure, compute the company's weighted average cost of capital. Type of Percent of Before-Tax Capital Capital Structure Component Cost Bonds 40% 7.5% Preferred Stock 5% 11% Common Stock (Internal Only) 55% 14% The company's marginal tax rate is 30%.

Select one:

a. 9.75%

b. 10.35%

c. 7.10%