Igloo Corporation had after$-$tax operating income last year of $$1,197,000.$ Two

sources of financing were used by the company: $$8$ million of unsecured bonds

paying $5$ percent interest, and $$2$ million in common stock, which was considered to

be relatively risky $($with a risk premium of $6$ percent$).$ The rate on long$-$term

treasuries is $3$ percent. Igloo Corporation pays a marginal tax rate of $30$ percent. The

weighted average cost of capital is

A$)2\mathrm{.}30$

B$)4\mathrm{.}60\%$

C$)6\mathrm{.}25\%$

D$)8\mathrm{.}75\%$

E$)$ none of the above