Lafantay incorporated has $75 million equity and $25 million of debt. The company uses the Dividend Growth Model approach to determine the cost of equity. Lafantays common stock currently trades at $40.5 per share. The dividend next year is expected to be $2.50 per share, and the dividend is expected to grow forever at a constant rate of 7 percent a year. Lafantays 8 percent coupon rate, quarterly payment, $1,000 par value bond, which matures in 20 years, currently sells at a price of $686.86. The companys tax rate is 40 percent. What is the companys weighted average cost of capital, WACC?

Please use excel and show equations.

A. 8.33%

B. 9.24%

C. 10.12%

D. 10.92%

E. 11.71%

Thank you!