The LMN Corporation has three bond issuances outstanding. Bond 1 is an annual bond with a $1,000 par value, $70 coupon payments, maturing in 8 years, and trades today at $1,030.44 with 90,000 bonds outstanding. Bond 2 is a semi-annual bond with a $10,000 par value, $300.00 coupon payments, maturing in 8 years, and trades today at $9,395.29 with 20,000 bonds outstanding. Bond 3 is a quarterly bond with a $1,000 par value, $17.75 coupon payments, maturing in 8 years and trades at $1,082.74 with 70,000 bonds outstanding. LMN has 1,800,000 shares of preferred stock outstanding paying a dividend of $6.70 with a share price of $51.50. LMN has 71 million shares of common stock outstanding with a reported beta of 1.10 that is trading at $19.40 and pays a dividend of $2.20 annually and expected sustained dividend growth of 3.10% for the foreseeable future. The expected return on the market is 9.10% and the risk-free rate is 3.10%. When measuring the expected return on equity, you decide to weight the return generated by CAPM at 80% and the Continuous Dividend Growth (Gordon Growth) model at 20%. The LMN Corporation is taxed at the 21% level.

What is the Weighted Average Cost of Capital for the LMN Corporation (do not round until the final answer)?

Select one:

a. Less than 8%

b. Between 8% and 9%

c. Between 9% and 10%

d. Between 10% and 11%

e. Greater than 11%