You were hired as a consultant to National Home Rentals (NHR), whose target capital structure is 40% debt, with common equity for the remainder. The interest rate on new debt is 6.00%, the cost of retained earnings is 14.25%, and the tax rate is 30%. The firm will not be issuing any new stock. What is NHR's WACC?

1.The after tax cost of debt is

2.The WACC formula is

a.WACC = (D/V) - R_D x (1-T_C) - (P/V) - R_P x (E/V) x R_E

b.WACC = (E/V) x R_E + (D/V) x R_D(1-TR) + (P/V) x R_P

c.WACC = (D/V) x R_D / (1-T_C) x (P/V) x R_P x (E/V) x R_E

d.WACC = (D/V) + R_D x (1-T_C) + (P/V) x R_P + (E/V) x R_E

3.NHRs WACC is?