Your Firm Has Earnings Before Interest and Taxes of $160,000

Multiple Choice

Your firm has earnings before interest and taxes of $160,000. Both the book and the market value of debt is $300,000. Your unlevered cost of equity is 12% while your cost of debt is 8%. The tax rate is 35%. What is your weighted average cost of capital?

A) 10.72%
B) 10.91%
C) 10.98%
D) 11.06%
E) 11.23%