A firm has $1,000 million in debt outstanding on the books, rated AA (carrying a yield to maturity of 8%). The beta of the stock is 1.05, and there were 100 million shares outstanding (trading at $35 per share). The treasury bond rate is 4%. The market risk premium is 5.5%. The corporate tax rate is 20%.

What is the firm's weighted average cost of capital (WACC)?

a) 8.09%

b) 9.38%

c) 9.025%

d) 9.775%