The company has 500,000 shares. The dividend to be paid after one year is expected to be EUR 1.5 per share, after which the dividend is expected to increase by 3% per year. Investors' return requirement per share is 13%. In addition, the company has issued a bond with a maturity of four years. The bond has a nominal value of EUR 3 million and a coupon rate of 8%. The Netherlands government risk-free bonds, on the other hand, currently have a 2% annual yield (yield to maturity) and the company has a credit rating corresponding to a 3% risk premium (ie the yield requirement above the risk-free interest rate).

What is the weighted average cost of capital (WACC) of a company if the corporate tax rate is 20%?

Select one:

a. 9.0%

b. 9.4%

c. 9.8%

d. 10.2%