1. The Black Knight has a debt-equity ratio of .6, a beta of 1.12, a stock price of $42 a share, and a tax rate of 34 percent. The firm just paid an annual dividend of $.80 a share and plans to increase that amount by 3 percent annually in the future. The firm has a pre-tax cost of debt of 7.7 percent. The risk-free rate is 3.8 percent and the market rate of return is 8.4 percent. What is Black Knights WACC?

   a. 6.08 percent

   b. 6.25 percent

   c. 7.15 percent

   d. 7.24 percent