Nine Point Industries has a capital structure of $30\%$ debt and $70\%$ common equity. This capital structure is expected not to change. The firm's tax rate is $34\%.$ The firm can issue the following securities to finance capital investments:

Debt: Capital can be raised through bank loans at a pretax cost of $6\mathrm{.}4\%.$ Also, bonds can be issued at a pretax cost of $7\mathrm{.}7\%.$

Common Stock: Retained earnings will be available for investment. In addition, new common stock can be issued at the market price of $$75.$ Flotation costs will be $$3\mathrm{.}50$ per share. The recent common stock dividend was $$4\mathrm{.}27.$ Dividends are expected to grow at $6\%$ in the future.

What is the cost of capital if the firm uses bonds and issues new common stock?

a$)10\mathrm{.}94\%$

b$)9\mathrm{.}41\%$

c$)9\mathrm{.}95\%$

d$)10\mathrm{.}16\%$

e$)8\mathrm{.}71\%$