Southern Ocean Mining Pty Ltd, an Australian listed company, has 1 000 000 ordinary shares outstanding and the current market price per share is $13. The required rate of return for the ordinary shares is estimated to be 15%. They have issued bonds with a face value of $8 000 000, but the current market value based on a yield to maturity of 5.5% is $7 750 250. If the corporate tax rate is 30%, what is the weighted average cost of capital assuming an imputation tax system? Assume all registered shareholders are Australian residents and all dividends are fully franked.

Select one:

a. 7.83%

b. 8.42%

c. 9.75%

d. 8.02%

e. 9.48%