Our firm survives for the next 3 years and then it is dissolved (no residual value). Each of these 3 years, it earns before interest and taxes $420,000 (i.e., these are the only payoffs that shareholders will ever recelve) and has already depreciated its fixed assets. It draws 25% of its financing from 3 year bonds with face value $1,000 (each) that pay an annual coupon of $50 and sell at par. The firm has a beta of 1.2 and faces a corporate tax rate of 20%. The risk free rate is 4% and the expected market return is 14%. What is the weighted-average cost of capital of the firm? a. 79 b. 1398 c. 14.5% d. 8.5% e. 10% 13.25% 10.596