You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred stock, and 45% common equity. The cost of debt is 10.00%, cost of preferred stock is 7.50%, and cost of common equity is 12.75%. The tax rate is 40%. What is its WACC?

a. 10.12%

b. 9.83%

c. 8.98%

d. 9.54%

e. 9.26%