Padgett Corporation estimates that it can issue debt at a rate of r _d = 10%, and its tax rate is 30 percent. It can issue preferred stock that pays a constant $4.50 dividend per year at a price of $38 per share. Also, its common stock currently sells for $32 per share, the next expected dividend (D ₁) is $1.28, and the dividend is expected to grow at a constant rate of 10 percent per year. The target capital structure consists of 70 percent common stock, 25 percent debt, and 5 percent preferred stock. What is Padgetts WACC?

	a.	9.02%
	b.	12.89%
	c.	12.14%
	d.	12.42%
	e.	5.14%