Use the following information

AT k_d = 6%; k_p = 7%; k_s = 10%

Total assets = $500,000

Total debt = 200,000

Total common stock = 200,000

Total preferred stock = 100,000

If the firm above decided to change its capital structure and finance itself completely with debt, calculate the WACC from the above information:

a	6%
b	7.8%
c	0.06%
d	cannot be determined given this information