A company has $650,000 of 10% debt outstanding and $500,000 of equity financing.  The required return of the equity holders is 15% and there are no retained earnings currently available for investment purposes.  If new outside equity is raised, it will cost the firm 16%.  New debt would have before-tax cost of 9%, and the corporate tax rate is 50%. When calculating the marginal cost of capital, the company should assign a cost of <List A> to equity capital and <List B> to the after-tax cost of debt financing.
A. A

B. C

C. B

D. D