David Ortiz Motors has a target capital structure of 27% debt and 73% equity. The yield to maturity on the company's outstanding bonds is 7.40%, and the company's tax rate is 25%. Ortiz's CFO has calculated the company's WACC as 9.15%. What is the company's cost of equity capital?
Answer is either:
a). 10.59
b). 13.10
c). 8.49
d). 10.48
e). 9.75