Daves Inc. recently hired you as a consultant to estimate the company$$s WACC. You have obtained the following

information. $(1)$ The firm's noncallable bonds mature in $20$ years, have an $8\mathrm{.}00\%$ annual coupon, a par value of $$1,000,$

and a market price of $$1,150\mathrm{.}00.(2)$ The company$$s tax rate is $40\%.(3)$ The risk$-$free rate is $4\mathrm{.}50\%,$ the market risk

premium is $5\mathrm{.}50\%,$ and the stock$$s beta is $1\mathrm{.}20.(4)$ The target capital structure consists of $35\%$ debt and the balance is

common equity. The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new

common stock. What is its WACC? Do not round your intermediate calculations.

a$.8\mathrm{.}61\%$

b$.7\mathrm{.}14\%$

c$.9\mathrm{.}90\%$

d$.9\mathrm{.}55\%$

e$.10\mathrm{.}67\%$