Peter's Audio Shop has a cost of debt of 7% and a cost of equity (common stock) of 11%. The firm has 104,000 shares of common stock outstanding at a market price of $20 a share. There are 40,000 shares of preferred stock outstanding at a market price of $34 a share, and the firm pays an annual preferred dividend of $2.72 per share. The firm has $510,000 in outstanding debt. The tax rate is 34%. What is the weighted average cost of capital for Peter's Audio Shop?

6.54%

9.45%

6.14%

9.14%

8.60%