The company has a target capital structure of 40 percent debt and 60 percent equity. $1000 par value bonds pay 10 percent coupon (semi-annual payments) , mature in 20 years, and sell for $ 849.54. The company stock beta is 1.2. Risk-free rate is 10 percent, and market risk premium is 5 percent. The company’s marginal tax rate is 40 percent. The weighted average cost of capital (WACC) is closest to:（）
A. 12.5%.
B. 13.0%.
C. 13.5%.
