The market value of XYZ Corporation's common stock is $60 million and the market value of its debt is $40 million. The cost of debt is 2 percent above the risk-free rate. The beta of the company's common stock is 0.85 and the expected market risk premium is 10 percent. If the Treasury bill rate is 4 percent, what is the firm's cost of capital?

		9.90%
		8.70%
		12.30%
		11.10%
		9.20%