Rowntree PLC Inc. is considering a new investment opportunity to grow revenues. The expected return ftom the project is expected to be 14%. Rowntree has 5000, 7%, 20yr, annual bonds outstanding, curretly trading at $1,100 per bond. The preferred shares are trading at $72 per share and pay a $6.00 dividend annually, 100,000 shares outstanding . Rowntree has 1,000,000 common shares outstanding trading at $34 pershare and has a required return of 10%.The tax rate is 20%. Calculate the WACC for Rowntree and decide if they should acccept OR reject the new project?

A.

15.35% ACCEPT

B.

9.14% REJECT

C.

15.35% REJECT

D.

9.14% ACCEPT