Daniel's Sound Systems is funded 56% with equity and 44% with debt. Its stock market price today is $36 a share. Last year, Daniel's paid an annual dividend in the amount of $1.593 per share. The dividend growth rate is 4%. The yield to maturity on Daniel's debt is 7.25%. The company's tax rate is 34%. What is Daniel's weighted average cost of capital?

1) 5.8%

2) 7.2%

3) 5.3%

4) 6.3%

5) 6.9%