You are the Chief Financial Officer of Incomprehensible Technologies Inc. (ITI). The CEO has asked you to calculate the firms overall WACC. Your team of analysts has presented you with the following data:

• Common Stock: The company has 50,000 shares of common stock outstanding that sells for $10 per share. The stocks beta is 1.8, Treasury Bills are yielding 2%, and the expected return of the market is 7%.
• Bonds: The company also has 625 bonds outstanding with a par value of $1000 and semi-annual coupon payments. The bonds have a coupon rate of 5%, there are 12.5 years to maturity, and they are currently selling on the market at $800.
• Preferred Stock: The company has no preferred shares outstanding.
• Ignore the effect of taxes

What is the company's WACC?

Multiple Choice

• 7.0%

• 9.2%

• 11.6%

• 8.9%

• 9.5%