Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D2 = $2.50), the dividend is expected to grow at a constant rate of 5-50% a year, and the common stock currently sells for $87.50 a share. The before-tax cost of debt is 7-50%, 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. O a. 6.85% O b. 7.13% O c. 6.99% O d. 5.98% O e. 7.21%