Mavs Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent

preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually,

a current maturity of 20 years, and sell for 1,100 USD. The firm could sell, at par, 100 USD preferred

stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Rollins'

beta is 1.2, the risk-free rate is 10 percent, and the market risk premium is 6 percent. Thefirm's marginal

tax rate is 40 percent. What is MAv's WACC?

A. 7.36%

B. 14.14%

C. 15.00%

D. 9.78