Question $40(1$ point$)$

Kosmo, Inc. has a market value capital structure of $20\%$ debt and $80\%$ equity. The tax rate is $40\%.$ The firm's bonds currently trade in the market for $$930.$ These bonds have a face value of $$1,000,$ a coupon rate of $8\%$ paid semiannually, and $10$ years remaining to maturity. The firm's common stock trades for $$15$ per share. The firm has just paid a dividend of $$2\mathrm{.}00($i$.$e$.,D_0=2\mathrm{.}00).$ Future dividends are expected to grow at $3\%$ per year. Based on this information, Kosmo, Inc.$\text{'}$s WACC is

$13\mathrm{.}35$

$10\mathrm{.}91$

$12\mathrm{.}17$

$14\mathrm{.}47$

$11\mathrm{.}94$

None of the answers in this list is within $0\mathrm{.}05$ percentage points of the correct answer.