Suppose That Glamour Nails, Inc

Multiple Choice

Suppose that Glamour Nails, Inc.'s capital structure features 30 percent equity, 70 percent debt, and that its after-tax cost of debt is 4 percent, while its cost of equity is 10 percent. If the appropriate weighted average tax rate is 21 percent, what will be Glamour Nails' WACC?

A) 4.78 percent
B) 5.80 percent
C) 7.94 percent
D) 7.00 percent