You are given the following information about your firm:

Your firm currently has $10-$year debt outstanding that pays interest of $$30$ every six months, has a maturity value of $$1,000,$ and currently sells for $$1,094\mathrm{.}424.$

Your investment bankers have told you that you can sell $$10,000,000$ of new, $20-$year bonds with an annual yield that would be $0\mathrm{.}20$ percent higher than the yield on your current $10-$year debt $($a premium of $0\mathrm{.}20\%$ because of maturity risk$).$ However, if you sell more than $$10,000,000$ of debt, the annual yield will be $0\mathrm{.}80$ percent higher than the yield on your current $10-$year debt $($a premium of $0\mathrm{.}80\%$ because of both an increasing supply and maturity risk$).$

Your common stock has a beta of $1\mathrm{.}38,$ while the risk$-$free rate is $4$ percent, and the riskpremium on the market is $10$ percent. The expected long$-$run sustainable growth rate is $5$ percent and the price of the stock is currently $$30\mathrm{.}00$ per share. $[$CAPM should be used for the cost of retained earnings and to calculate D$1$ in the Gordon Growth formula.$]$

Your firm plans to add $$4\mathrm{.}2$ million to retained earnings over the coming year.

Your investment bankers have told you that you can issue up to $$12,000,000$ of new common stock at the current price of $$30\mathrm{.}00$ per share. However, if you issue more than $$12,000,000,$ the market price would drop to $$27\mathrm{.}00$ per share due to the increase in supply. The flotation cost for both issues would be $15\mathrm{.}0$ percent of the issue price.

Your firm has a targeted capital structure of $40$ percent debt and $60$ percent equity.

Your firm has a marginal tax rate of $40$ percent.

Assuming that the firm intends to raise a total of $$26\mathrm{.}585$ million over the coming year, determine the weighted average cost of capital for raising the last dollar.

$13\mathrm{.}38\%$

$12\mathrm{.}81\%$

$13\mathrm{.}65\%$

$13\mathrm{.}03\%$

$13\mathrm{.}52\%$