Company Davis is a US manufacturer of prestige golf clubs. The company’s market equity is valued at $20 million, and the market value of its risk-free debt is $10 million. Sammy who is a junior financial manager estimates that the required rate of return on the equity is 20% and that on the debt is 8%. The corporate tax rate is zero. Advise Sammy as to the company’s WACC:

a. 17%

b. 16%

c. 8.1%

d. None of the above