Your firm is planning to invest in a new electrostatic power generation system. Electrostat Inc is a firm that specializes in business. Electrostat has a stock price of $25 per share with 16 million shares outstanding. Electrostat's equity beta is 1.18. It also has $220 million in debt outstanding with a debt beta of .08. If the risk-free rate is 3%, and the market risk premium is 6%, then your estimate of your cost of capital for electrostatic power generators is closest to:

a. 7.50%

b. 7.75%

c. 9.50%

d. 10.10%