Using the information from the previous question, suppose Cowles Corp. decides to change its debt ratio to 20%. The new interest rate is 7.2%. The company's business risk, opportunity cost of capital, and tax rate have not changed. What is the new WACC? (hint: use three steps)

A. 12.36%

B. 12.84%

C. 13.42%

D. 13.81%

E. 14.23%

Previous Question Info:

Suppose Cowles Corp.'s market value of debt is $7,000,000 and it has 1,500,000 shares selling at $8 per share. What is the WACC if the cost of debt is 9.1% and the expected rate of return on the stock is 17.7%, given the marginal tax rate is 21%?