Sally Johnson, an investment analyst, has collected the following information regarding Lehman & Tiffany Co.: --The yield to maturity (YTM) on the company's bonds is 10 percent. --The company's current dividend is $0.80 a share. --The company's stock price is $22. --The company expects that its dividend will grow at a constant rate of 8 percent a year. --The company's capital structure is 65 percent equity and 35percent debt. The company's tax rate is 40%. --The company anticipates that total flotation costs will equal 11 percent of the amount issued. Assume the company accounts for flotation costs. Calculate the company's WACC. A. 10.2% B. 10.8% C. 9.7% C. 11.4% D. 12.2% E. 8.6%