Given an optimal capital structure that is 50 % debt and 50 % common stock, calculate the weighted average cost of capital for Stone Corp. given the following additional information.

Bond Coupon Rate = 8% Bond Yield to Maturity = 6% Dividend, expected = $5 Price, common = $80

Growth Rate = 5% Corporate Tax Rate = 30 %

A) Less than 5.0%

B) More than 5.0% and less than 6.25%

C) More than 6.25% and less than 7.5%

D) More than 7.5%