TJ Industries Has 7 Million Shares of Common Stock Outstanding

Multiple Choice

TJ Industries has 7 million shares of common stock outstanding with a market price of $20.00 per share. The company also has outstanding preferred stock with a market value of $10 million, and 100,000 bonds outstanding, each with face value $1,000 and selling at 95% of par value. The cost of equity is 12%, the cost of preferred is 10%, and the cost of debt is 6.45%. If TJ's tax rate is 34%, what is the WACC?

A) 8.92%
B) 9.76%
C) 12.59%
D) 13.43%