Suppose that Taggart Transcontinental currently has no debt and has an equity cost of capital of 12%. Taggart is considering borrowing funds at a cost of 8% and using these funds to repurchase existing shares of stock. Assume perfect capital markets. If Taggart borrows until they achieved a debt-to-value ratio of 30%, then Taggart's levered cost of equity would be closest to:

Select one:

A. 13.7%

B. 9.2%

C. 8.0%

D. 20.0%

E. 10%