You are analyzing a company that has a term loan for $500 million that matures in 5 years (bullet, no mandatory repayment in interim years).The interest rate on the term loan is 3-month LIBOR+250. The 5 year LIBOR swap rate is 3.70%.

The company also has one fixed rate bond outstanding that matures in 10 years. The face amount of the bond is $500 million. The coupon rate on the bond is 5%. The market yield on the bond is 4%, and the bond's current price is 108.18 (per face amount of 100).

The company's market capitalization is $700 million, and its cost of equity is 9.00%.

The marginal tax rate is 25%.

What is the company's WACC?

Group of answer choices

5.89%

4.77%

7.42%

5.29%