Ravencroft Supplies is estimating its weighted average cost of capital (WACC). Ravencroft’s optimal capital structure includes 10 percent preferred stock, 30 percent debt, and 60 percent equity. They can sell additional bonds at a rate of 8 percent. The cost of issuing new preferred stock is 12 percent. The firm can issue new shares of common stock at a cost of 14.5 percent. The firm’s marginal tax rate is 35 percent. Ravencroft’s WACC is closest to:()

A. 12.3%.

B. 13.3%.

C. 11.5%.