Daniel's Sound Systems has 210,000 shares of common stock outstanding at a market price of $36 a share. Last month, Daniel's paid an annual dividend in the amount of $1.593 per share. The dividend growth rate is 4%. Daniel's also has 6,000 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 7% coupon, pay interest annually, and mature in 4.89 years. The bonds are selling at 99% of face value. The company's tax rate is 34%. What is Daniel's weighted average cost of capital?

Hint: to find the bonds' YTM use N = 4.89

A. 5.3%

B. 5.8%

C. 6.3%

D.6.9%

E. 7.2%