The following data is regarding the Link Company:
·A target debt/equity ratio of 0.5
·Bonds are currently yielding 10%
·Link is a constant growth firm that just paid a dividend of $3.00
·Stock sells for $350 per share, and has a growth rate of 5%
·Marginal tax rate is 40%
What is Link's after-tax cost of capital?

A.12.5%.

B.12.0%.

C.11.0%.