Sorensen Systems Inc. is expected to pay a $1.40 dividend at year end (D1 = $1.40), the dividend is expected to grow at a constant rate of 7.00% a year, and the common stock currently sells for $85.00 a share. The before-tax cost of debt is 10.00%, and the tax rate is 25%. The target capital structure consists of 45% debt and 55% common equity. What is the company's WACC if all the equity used is from retained earnings? Do not round your intermediate calculations. a. 8.13% b. 8.02% c. 8.19% d. 6.94% e. 8.07%