Calculate WACC for ABC Company given:

Tax Rate 40%

Bonds on the balance sheet at 300M

Equity on the balance sheet at 700M

US Treasury 10 Year Bond Rate 1.2%

Market Capitalization is 2,000M

The Company's Beta is slightly aggressive at 1.3

Bond Credit Rating is A

Bonds were issued 5 years ago at 3%. Current bonds with A Bond rating selling at a 2.5% premium to the US Treasury Rates.

Assume a Maturity Risk Premium of 5% in CAPM.

The company has 100M in Cash on the balance sheet and pays a dividend of $2 per share.

a	7.2%
b	6.9%
c	6.8%
d	7.5%