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The company has a target D/E ratio = 2/3. Bonds with face value of $1,000 pay a 10% coupon, mature in 20 years, and sell

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The company has a target D/E ratio = 2/3. Bonds with face value of $1,000 pay a 10% coupon, mature in 20 years, and sell for $849.54. The company stock beta is 1.2. Risk-free rate is 10%, and market risk premium is 5%. The company is a constant-growth firm that just paid a dividend of $2, sells for $27 per share, and has a growth rate of 8%. The company's marginal tax rate is 40%. What is the company's weighted average cost of capital? O A 11.6% OB 12.5% O c. 10.7% OD. 14.4%

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