Simon Corporation is considering the acquisition of Ingram Company. Ingram has a capital structure consisting of $7.5 million (market value) of 11% bonds and $15 million (market value) of common stock. Ingram's pre-merger beta is 1.36. Simon's beta is 1.02, and both it and Ingram face a 40% tax rate. Simon's capital structure is 40% debt and 60% equity. The free cash flows from Ingram are estimated to be $4.5 million for each of the next 4 years and a horizon value of $15 million in Year 4. Tax savings are estimated to be $1.5 million for each of the next 4 years and a horizon value of $7.5 million in Year 4. New debt would be issued to finance the acquisition and retire the old debt, and this new debt would have an interest rate of 8%. Currently, the risk-free rate is 6.0% and the market risk premium is 4.0%. What discount rate should you use to discount Ingram's free cash flows and interest tax savings? A)11.29% B)10.72% C)12.94% D) 9.69%