1. Company ABC has 80,000 bonds outstanding that are selling at par value and have a yield to maturity of 8.5%. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4% and the market risk premium is 8%. ABC's tax rate is 35%. What is ABC's weighted average cost of capital (WACC)?

   	A.	7.39%
   	B.	11.65%
   	C.	7.10%
   	D.	10.38%