Speck Equipment has 80 000 bonds outstanding that are selling at par of R1 000. Bonds with similar characteristics are yielding 6.75%. The company also has 750 000 shares of 7 % preference shares and 2.5 million shares of ordinary equity outstanding. The preference shares sell for R53 a share and have a par value of R100. The ordinary equity has a beta of 1.34 and sells for R42 a share. Government bonds yield a return of 2.8% per annum and the return on the market is 11.2 %. The corporate tax rate is 28%. What is the firm's weighted average cost of capital?

A 10.51% B 10.64% C 11.18% D 11.30%

Please can you provide reasoning for why the answer is A 10.51%. Thank you :)