Lauren sold a noncallable bond several years ago that now has 20 years to maturity. The bond has a 9.25% annual coupon, paid semiannually, sells at a price of $1025, and has a par value of $1000.

The cost of common equity is 11.26%, the firms tax rate is 40%, and the target capital structure consists of 50% debt and 50% common equity.

What is the companies WACC?

8.32%

10.12%

5.39%

6.98%

7.87%