Ben's Budget Gourmet Restaurants Has a Current Capital Structure That

Ben's Budget Gourmet Restaurants has a current capital structure that is 70% equity, 20% debt, and 10% preferred stock. This is considered optimal. Ben is considering a $100 million capital budgeting project. Ben has estimated the following:
After-tax cost of debt: 7.0%
Cost of preferred stock: 8.0%
Cost of internal equity: 13.0%
Cost of external equity: 15.0%
Ben expects to have $40 million of new retained earnings available to finance this project. What is Marion's cost of capital for this project?

A) 12.10%
B) 10.75%
C) 11.90%
D) 12.45%