An all equity financed company currently has a beta of $1\mathrm{.}2$ and a marginal tax rate of

$20\%.$ The expected return on the market is $8\%.$ The risk$-$free rate of return is $3\%.$

The company's before$-$tax cost of debt is $5\%.$

The company decides to alter its capital structure and will target $50\%$ debt, which

will remain constant. What is this company's new weighted average cost of capital

$($WACC$)?$

a$)6\mathrm{.}5\%$

b$)7\mathrm{.}7\%$

c$)8\mathrm{.}9\%$

d$)10\mathrm{.}2\%$