Problem $01\mathrm{.}047-$ Option with the lower WACC

$10$ points

Ayratonia, a working project manager and promising musician, wants to purchase a new guitar and case for $$11700.$ When they learned of this opportunity, the grandparents provided a gift of $$2800.$ Ayratonia decided that there are two options for the actual purchase. Determine which option has the lower WACC now. $($Round the final answer to two decimal places.$)$

Add the $$2800$ to a current investment portfolio yielding an average of $8\mathrm{.}17\%$ per year $($first dividend is received one year after the initial purchase$)$ and borrow the entire amount at a rate of $5\mathrm{.}86\%$ per year.

Use the $$2800$ gift and borrow the remaining amount at a rate of $5\mathrm{.}20\%$ per year.

Option $2$ has a lower WACC at $[3\mathrm{.}95\%$ per year.