ABC$$s current capital structure is comprised of $60\%$ debt and $40\%$ equity $($based on market values$).$ ABC$$s equity beta $($based on its current level of debt financing$)$ is $1\mathrm{.}20,$ and its debt beta is $0\mathrm{.}1.$ Also, the risk$-$free rate of interest is currently $4\mathrm{.}5\%$ on long$-$term government bonds. The after$-$tax cost of debt is $6\%.$ ABC$$s investment banker advised the firm that, according to her estimates, the market risk premium is $7\%.$

ABC is considering a major expansion of its current business operations. The firm$$s investment banker estimates that ABC will be able to borrow up to $80\%$ of the needed funds and maintain its current credit rating and borrowing cost. Estimate the WACC for this project.

A$.$

$8\mathrm{.}92\%$

B$.$

$9\mathrm{.}92\%$

C$.$

$10\mathrm{.}92\%$

D$.$

$11\mathrm{.}92\%$