Assume JUP Has Debt with a Book Value of $20

Multiple Choice

Assume JUP has debt with a book value of $20 million,trading at 120% of par value.The bonds have a yield to maturity of 6%.The firm has book equity of $20 million,and 2 million shares trading at $18 per share.The firm's cost of equity is 12%.What is JUP's WACC if the firm's marginal tax rate is 35%?

A) 9.60%
B) 8.76%
C) 9.00%
D) 6.24%
E) 7.34%