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An analyst collects the following information about a company and its capital structure:
| Proportion of debt | 40% |
|---|---|
| Proportion of equity | 50% |
| Proportion of preferred shares | 10% |
| Before-tax cost of debt | 8% |
| Cost of equity | 16% |
| Cost of preferred shares | 10% |
| Marginal tax rate | 25% |
If interest expense is tax deductible, the company's WACC is closest to:
A
11.2%
B
11.4%
C
12.2%