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Suppose that Vandelay Inc. is a firm that uses both equity and debt financing. Its equity beta is 1.35. The riskless rate is 3 percent

Suppose that Vandelay Inc. is a firm that uses both equity and debt financing. Its equity beta is 1.35. The riskless rate is 3 percent and the market risk premium is 7 percent. Vandelay's outstanding bonds have a yield of 6 percent and the corporate tax rate is 20 percent. Vandelay has 2.2 million equity shares outstanding that trade at $12 each. Vandelay's outstanding debt consists of 110,000 bonds with a current quote of $132 each. What is Vandelay's weighted average cost of capital? O A 13.87% OB. 8.05% OC 17.75% OD. 9.74% OE 10.54%

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