Jack's Construction Co. has 10,000 annual bonds outstanding. Each bond has a face value of $1,000, and the bonds are selling at 80% of face value. Bonds with similar characteristics are yielding 8.6 percent. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $4 a share. The risk-free rate is 4 percent, and the market risk premium is 8 percent. Jack's tax rate is 34 percent. What is Jack's weighted average cost of capital?

10.43%

10.06%

11.47%

11.18%

11.40%