If you use the Risk-Free + Premium method for calculating the cost of debt (or expected return on debt), what would the answer be?

Risk free
	Treasury Bond		0.07
Bonds Data
	inflation (5 years)		0.02
	inflation (next 5)		0.01
	MRP (formula)		0.001 X (tm-1)	tm = maturity
	DRP		0.001
	LP		0.001
	Maturity		10
	Bonds outstanding (semi annual)
	Currrent Price		$1,154
	coupon rate		12.0%
	Years to Maturity		15
	Par Value		1000
Preferred stock
	Par value		$100
	Dividend Rate		10.0%
	Current price		$111

Common Stock
	Current price		$50.00
	Last dividend		$4.19
	Growth rate		5.0%
	Beta		1.2
	Market return		13%
Consultant's Forecasts of the project's returns
	Economic Conditions	Prob	Return
	Strong	50%	20%
	Normal	30%	10%
	Weak	20%	-28%

	a.	9.6%
	b.	5.5%
	c.	2.2%
	d.	12.5%