The common stock of Hopewell Co. has a beta of 1.1. The Treasury bill rate is 5 percent and the market risk premium is estimated at 7 percent. Hopewell's capital structure is 40 percent debt with a yield to maturity of 6.9 percent. If the company pays no taxes, what is its weighted-average cost of capital?

13.68 percent

6.96 percent

9.22 percent

10.38 percent

12.70 percent