Marthas Grapevines, Inc. has an EBIT of $46,000, no debt, a 34% tax rate, and a 15% cost of capital. After issuing $75,000 of debt at 10% interest rate, what is the weighted average cost of capital (WACC) for Marthas Grapevines?

Question options:

a)

12.37%

b)

12.61%

c)

12.88%

d)

13.05%

e)

13.32%