Sorensen Systems Inc. is expected to pay a $2.50 dividend at year end (D1-$2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $37.50 a share. The before-tax cost of debt is 7.50%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the company's WACC if all the equity used is from retained earnings? Do not round your intermediate calculations. OA. 8.41% OB. 7.72% OC. 10.04% OD.9.10%