20.

20. The director of capital budgeting for XYZ, Inc. is considering a plan to expand. The firm's target capital structure calls for a debt ratio of 39%. XYZ currently has a bond issue outstanding that will mature in 10 years and has a 6% annual coupon rate (paid semi-annually). The bonds are currently selling for $1,111.21. The firm has maintained a constant growth rate of 3%. XYZ 's most recent dividend was $3.35 and its current stock price is $49.29. Its tax rate is 21%. What is the firm's Weighted Average Cost of Capital (WACC)? a. 7.39% b. 6.68% c. 6.81% d. 7.10% e. 7.52%