please choose the right option.

Marked out of 3.00 P Flag question A firm has determined its optimal capital structure, which is composed of the following sources and target market value proportions: long term Debt 30%, preferred stock: 5% and the common equity stock is 65%. Debt: The firm can sell a 20-year, $1,000 par value, 10 percent bond for $980. A flotation cost of 4 percent of the face value would be required. Preferred Stock: The firm has determined it can issue preferred stock at $70 per share par value. The stock will pay an $8.00 annual dividend. The cost of issuing and selling the stock is $3 per share. Common Stock: The firm's common stock is currently selling for $50 per share. The dividend expected to be paid at the end of the coming year is $5.07. Its dividend payments have been growing at a constant rate for the last five years for 7%. It is expected that to sell, a new common stock issue must be paid $2 per share in flotation costs. Additionally, the firm's marginal tax rate is 40 percent. The firm's weighted average cost of capital assuming the firm has exhausted all retained earnings. O a. 15.1% b. 10.5% O c. 11.8% O d. 13.9%