AZ products has 375,000 shares of common stock outstanding at a market price of $32 per share. Next years annual dividend is expected to be $1.50 a share and the dividend growth rate is 2%. The firm also has 7,500 bonds outstanding with Face value of $1,000 per bond. The bonds have a pretax yield of 7.65% and sell at 98.6% of face value. The company tax rate is 34%. What is the firms weighted average cost of capital?

6.59%

5.41%

6.06%

7.52%

5.58%