As a New Hire with the ABC Corp., you have been asked to recommend an appropriate Discount Rate (DR) for all capital Budgeting Projects, using the following formula:

DR = WACC + 1.5%

You have collected the following Data to calculate the Appropriate WACC:

NOTE: ABC is the 21% Marginal Tax Bracket (MTB)

Total Mkt Value of ABC = $1.20 billions

SECURITY	% Weight	REMARKS
1 BONDS	40%	8% Bond with Remaining Maturity of 15 yrs. Mkt Price= 110 per Bond
2 Pf Stocks	10%	PPS = $ 87.00, Div per yr = $ 6.00
3 CS	50%	PPS = $92.00, Div = $ 4.50 per yr, Div Growth Rate (g) = 5%

CS = Common Share: PPS = Price per share and Pf = Preferred

Based on your calculations, you are recommending a DR of:

	a.	8.6%\
	b.	10.0%
	c.	12.5%
	d.	11.2%
	e.	7.9%
	f.	9.3%