The market value of Fords' equity, preferred stock and debt are$8 billion, $4 billion and $12 billion respectively. Ford has a beta of 1.2, the market risk premium is 7% and the risk-free rate of interest is 5%. Ford's preferred stock pays a dividend of $4 each year and trades at a price of $28 per share. Ford's debt trades with a yield to maturity of 10%. What is Ford's weighted average cost of capital if its tax rate is 25%?

A.

9.54%

B.

9.01%

C.

10.6%

D.

10.07%