Longstreet Communications Inc. $($LCI$)$ has the following capital structure, which itconsiders to be optimal: debt $=20\%,$ preferred stock $=20\%,$ and common equity $=40\%.$ LCI's tax rate is $25\%,$ and investors expect earnings and dividends to grow at a constant rate of $5\%$ in the future. LCI paid a dividend of $$1\mathrm{.}00$ per share last year $($Do$)$ and its stock currently sells at a price of $$10\mathrm{.}50$ per share. Ten$-$vear Treasury bonds yield $5\%,$ the market risk premium is $5\%,$ and LCI's beta is $2\mathrm{.}0.$ The following terms would apply to new security offerings.Debt: New debt could be sold at par with a coupon rate of $10\%.$ New debt with a face value of $$1,000$ will mature in $10$ years. Interest is paid semiannually. Ignore flotation costs.Preferred stock: New preferred stock could be sold to the public at a price of $$100$ per share, with a dividend of $$9\mathrm{.}50.$ Flotation cost of $$5$ per share would be incurred.Common equity: New common equity can be raised either by retaining earnings or by issuing new common stock. The flotation cost for new common stock issuance is $10\%.$ Use the judgmental risk premium of $5\%$ for the Bond$-$Yield$-$Plus$-$Risk$-$Premium method.What is LCI's WACC when common equity is raised by issuing new common stock?$*1)13\mathrm{.}17\%*2)12\mathrm{.}50\%*3)11\mathrm{.}56\%*4)10\mathrm{.}61\%*5)10\mathrm{.}27\%$