Using the following information calculate the company's weighted average cost of capital:

Cost of equity	8.0%
Cost of existing debt	6.5%
Cost of debt at target capital structure	4.9%
Tax rate	25.0%
% equity in existing capital structure	90.0%
% debt in existing capital structure	10.0%
% equity in target capital structure	75.0%
% debt in target capital structure	25.0%

Select one:

6.92%

4.76%

7.22%

7.57%