Your company stock trades for $52.50 per share. It is expected to pay a $2.50 dividend at year end (D1 = $2.50), and the dividend is expected to grow at a constant rate of 5.50% a year. The before-tax cost of debt is 7.75%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is your company's WACC if all the equity used is from reinvested earnings?

A. 6.89

B. 7.17%

C. 7.74%

D. 8.02%

E. 8.30%