Wright Express (WE)has a Capital Structure That's 30% Debt and 70

Multiple Choice

Wright Express (WE) has a capital structure that's 30% debt and 70% equity. The firm is considering a project that requires an investment of $2.6 million. To finance this project, WE plans to issue 10-year bonds with a coupon rate of 12% and a yield to investors of 12.4%. If the current risk-free rate is 7% and the expected market return is 14.5%, what is Wright's WACC if its beta is 1.2 and it is subject to a marginal tax rate of 40%.

A) 14.9%
B) 12.4%
C) 13.4%
D) 16.0%