The correct answer is A$,$ but I don't know why, my answer is always b

Simple Tech Inc is an Australian company operating in a pure imputation tax system. It is

currently financed entirely $(100\%)$ by equity and has a beta of $0\mathrm{.}8.$ After examining its capital

structure, Simple Tech finds that the optimal capital structure can be achieved at D$/$E ratio of

$0\mathrm{.}4.$ The before$-$tax cost of debt capital for Simple Tech at the optimal capital structure is

$10\%$ p$.$a$.$ The risk$-$free rate and market risk premium are $5\%$ p$.$a$.$ and $7\%$ p$.$a$.,$ respectively. If

the statutory corporate tax rate is $30\%,$ which of the following is closest to the cost of equity

at the optimal capital structure $($using the approach covered in the lecture$)?$

a$)12\mathrm{.}84\%$ p$.$a$.$

b$)12\mathrm{.}17\%$ p$.$a$.$

c$)12\mathrm{.}03\%$ p$.$a$.$

d$)11\mathrm{.}69\%$ p$.$a$.$

e$)10\mathrm{.}60\%$ p$.$a$.$