You were hired as a consultant to Giambono Company, whose target capital structure is 30% debt, 20% preferred, and 50% common equity. The after-tax cost of debt is 4.00%, the cost of preferred is 8.50%, and the cost of retained earnings is 13.50%. The firm will not be issuing any new stock. What is its WACC?

a. 9.65% b. 7.92% c. 7.66% d. 8.87% e. 6.70%