What is the Acme Companys weighted average cost of capital if its cost of before-tax debt is 8% (20% of overall capital structure), its cost of preferred stock is 9.5% (20% of capital structure) and is cost of internal equity is 15.5% (60% of the capital structure)? The marginal tax rate is 34%.

a.

12.3%

b.

11.7%

c.

12.8%

d.

11.8%