A firm is considering a new project that will require an initial outlay of $20 million. It has a target capital structure of 55% debt, 15% preferred stock, and 30% common equity. The firm has non-callable bonds that mature in five years with a face value of $1,000, an annual coupon rate of 8%, and a market price of $1080.64. The yield on the companys current bonds is a good approximation of the yield on any new bonds that are issued. The cost of preferred stock for the firm is 12.5% and the cost of common equity is 14%. The firm has a marginal tax rate of 40%. Determine the firms WACC for this project?

8.86. A

10.09. B

9.42. C

9.92. D

8.08 E