Sorensen Systems Inc. is expected to pay a $$2\mathrm{.}50$ dividend at year end $(D_1=$$$2\mathrm{.}50),$ the dividend is expected to grow at a constant rate of $5\mathrm{.}50\%$ a year, and the common stock currently sells for $$37\mathrm{.}50$ a share. The before$-$tax cost of debt is $7\mathrm{.}50\%,$ and the tax rate is $40\%.$ 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.

$9\mathrm{.}41\%$

$8\mathrm{.}72\%$

$7\mathrm{.}58\%$

$9\mathrm{.}94\%$

$8\mathrm{.}80\%$