Your firm recently paid a dividend of $4 to common stockholders. Dividends are expected to grow at 8% per year for the foreseeable future. The current stock price is $54. New shares could be sold for the same price, but flotation costs would amount to $6 per share. Preferred stock would pay a 12% dividend on a $50 par value. The stocks would sell for par value less flotation costs of $2 per share. Wellington has a marginal tax rate of 34%. What is the firm's cost of capital if their capital structure consists of 60% equity and 40% preferred stock? \begin{tabular}{c} \hline 14.60% \\ \hline 12.58% \\ \hline 11.98% \\ \hline 13.21% \\ \hline 15.20% \\ \hline \end{tabular}