Integrated Septic Services, is manufacturer of septic tanks whose slogan is "we are number 1 in the number 2 business." The firm recently paid a dividend of $2.75 and it is expected grow at a constant rate of 10% indefinitely, and the common stock currently sells for $52.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The capital structure consists of 45% debt and 55% common equity. What is the company's WACC if all the equity used is from retained earnings?

7.01%

7.45%

7.67%

10.69%

11.32%