You are given the following information: EBIT (for firms L and U in perpetuity) = $300,000; corporate tax rate (T) = 30%; cost of equity for firm U (K_su or r_su) = 10%; cost of debt for firm L (K_d or r_d) = 8%; level of debt for firm L (D) = $1,200,000.

What are the WACCs of firms U and L, respectively, under M&M theory with corporate taxes?

	1.	10% (U), 8.53% (L)
	2.	10%(U), 8.10% (L)
	3.	11.33% (U), 10.53% (L)
	4.	10% (U), 11.33% (L)