Assume that you are on the financial staff of Sinkey Enterprises, and you have collected the following data:(1) The yield to maturity on the company's outstanding 7% annual coupon bonds is 5.0%, and its tax rate is 25%.(2) The risk-free rate is 3.0%, the market risk premium (r_M - r_RF) is 6.0%, and the firm's beta is 1.10.(3) The firm's capital structure consists of 40% debt and 60% equity. What is Sinkey's WACC?

a.6.50%

b.6.89%

c.7.26%

d.7.76%

e.9.60%