Sheraton Incorporation is planning a $100 million expansion. This expansion will be financed, in part with debt issued with a coupon interest rate of 10.00%. Interest is paid annually. The bonds have a 20 -year maturity and a $1000 face value, and they will be sold to net Sheraton $687 after issue costs. Sheraton's marginal tax rate is 30% Preferred stock will cost Sheraton 20% after tax. Sheraton common stock pays a dividend of $3 per share. The current market price per share is $24, and new share can be sold to net $20 per share. Sheraton's dividends are expected to increase at an annual rate of 7% for the foreseeable future. Sheraton expects to have $25 million of retained earnings available to finance the expansion. Sheraton's target capital structure is as follows: Calculate the weighted average cost of capital that is appropriate to use in evaluating this expansion program. 17.72% 17.23% 18.80% 19.29%