1. Bucha Inc. is thinking about investing in a new project. The balance sheet reports that they currently have $72 million worth of long-term debt. Their current cost of debt is 4%. According to Yahoo.Finance.com the current required return to Buchas stock is 11%, the company has 1.5 million shares of stock outstanding and the stock currently trades for $37 per share. If their average tax rate is 20% and they have no preferred stock, what Buchas weighted average cost of capital?

   	A.	6.60%
   	B.	7.50%
   	C.	None of these
   	D.	14.20%
   	E.	7.05%