Ordinary shares pay a dividend of 68 cents per year, and are expected to pay the same dividend amount indefinitely. Commonwealth government bonds trade at 5%.The return on the market portfolio is 13%. Pippin Ltds beta is 1.5. Its bonds are priced at $106. The current return on Pippin Ltd debentures is 2% above the government bond rate. No company or personal taxes are levied. What is the WACC? a. 13.94% b. 2.78% c. 5.89% d. 7.90%

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