The value of stock index at the end of 1970 was 2; at the end of 2019 it was 32. Long-term risk-free rate is 3.03%. Current interest rates on the bonds with the same risk as the bonds of this firm is 6.9%. The book value of debt is $2000. The firm has 1,000 shares; share price is $10; beta is 1.24; tax rate is 20%. Estimate the weighted average cost of capital.

• A. 4.3%.
• B. 5.6%.
• C. 6.0%.
• D. 6.3%.