Lever Ltd has an after-tax cost of debt capital of 5 per cent, a cost of preference shares of 9 per cent, a cost of equity capital of 11 per cent and a WACC of 6 per cent. Lever Ltd intends to maintain its current capital structure as it raises additional capital. In making its capital budgeting decisions for the average-risk project, the relevant cost of capital is:

(a) 4 per cent.

(b) 6 per cent.

(c) 8 per cent.

(d) 9 per cent.