S Corp. is expected to pay a $2.55 dividend at year end, the dividend is expected to grow at a constant rate of 4.50% a year, and the common stock currently sells for $35 a share. The before-tax cost of debt is 5.50%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the companys WACC? Do not round your intermediate calculations.

a. 9.05% b. 7.49% c. 6.96% d. 8.39% e. 9.27%