Use the following information to answer the next question.

The Global Advertising Company has a marginal tax rate of 40%.

The company can raise debt at a 8% interest rate.

The last dividend paid by Global was $1.10. Globals common stock is selling for $7.93 per share, and its expected growth rate in earnings and dividends is 4%.

Global plans to finance all capital expenditures with 20% debt and 80% equity.

What is the firm's weighted average cost of capital if the firm has sufficient retained earnings to fund the equity portion of its capital budget?

Select one:

a. 11.59%

b. 15.70%

c. 13.95%

d. 12.37%

e. 14.61%