Phillips Equipment has 80,000 bonds outstanding that are selling at par of $1000 per bond. Bonds with similar characteristics are yielding 7.5 percent. The company also has 750,000 shares of preferred stock outstanding, with a stated $7 coupon payment. The preferred stock sells for $65 a share. The firm has 2.5 million shares of common stock outstanding. The common stock sells for $42 a share and has a beta of 1.34. The U.S. Treasury bill is yielding 2.8 percent and the return on the market is 11.2 percent. The corporate tax rate is 38 percent. What is the firm's weighted average cost of capital?

Group of answer choices

10.15 percent

10.64 percent

11.18 percent

11.30 percent

11.56 percent