Buster's Target Debt-To-Equity Ratio Is 0

Multiple Choice

Buster's target debt-to-equity ratio is 0.65,its cost of equity is 13.7 percent,and its beta is 0.9.The after-tax cost of debt is 5.8 percent,the tax rate is 34 percent,and the risk-free rate is 2.3 percent.What discount rate should be assigned to a new project the firm is considering if the project's beta is estimated at 0.87?

A) 11.08%
B) 9) 44%
C) 11.67%
D) 9) 67%
E) 10.36%