The DEF Company is planning a $64 million expansion. The expansion is to be financed by selling $25.60 million in new debt and $38.40 million in new common stock. The before-tax required rate of return on debt is 9% and the required rate of return on equity is 14%. If the company is in the 30% tax bracket, what is the firms cost of capital?

18.82%

10.74%

10.92%

11.05%