Chelsea Enterprises stock trades for $50 per share. It is expected to pay a $3 dividend at year end (D₁ = $3), and the dividend is expected to grow at a constant rate of 5% a year. The before-tax cost of debt is 8.00%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the company's WACC if all the equity used is from retained earnings?

		7.43%
		7.55%
		7.89%
		8.52%
		8.56%