KD Corp. issued 7.6% semiannual-pay coupon bonds five years ago at par value. The bonds mature 10 years from today and are currently selling at $1,103.19. The beta for the KD Corp. common stock is 1.2. The firm has a target capital structure of 30% debt and 70% equity, but the actual weights reported on the firm's balance sheet are 45% debt and 55% equity. KD Corp has a 21% marginal tax rate. Assume the risk-free rate is 3% and the market risk premium is 7%. What is the weighted average cost of capital for KD Corp?

Select one:

a. 6.89%

b. 7.86%

c. 8.47%

d. 8.97%

e. 9.45%