Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BEA currently has $115,840,000 in debt carrying a rate of 5%, and its stock price is $64 per share with 1,810,000 shares outstanding. BEA is a zero-growth firm and pays out all of its earnings as dividends. The firm's EBIT is $34,057,000, and it faces a 40% federal-plus-state tax rate. The market risk premium is 8%, and the risk-free rate is 4%. BEA is considering increasing its debt level to a capital structure with 70.0%% debt, based on market values, and repurchasing shares with the extra money that it borrows. BEA will have to retire the old debt in order to issue new debt, and the rate on the new debt will be 5.75%. BEA has a beta of 1.33. What is BEA's new WACC after the capital structure change?

1. 10.5466%
2. 5.1246%
3. 8.4030%
4. 9.2145%
5. 18.0844%