Busters Ice Cream has 2,500 bonds outstanding that are selling for $1,020 each and yielding a pretax 7.2 percent. There 60,000 shares of common stock outstanding with a beta of 1.3 and a market price of $56 a share. The risk-free rate is 4 percent, the market risk premium is 7 percent, and the tax rate is 35 percent. What is the WACC?
A. 7.26%
B. 7.39%
C. 8.59%
D. 9.03%
E. 9.47%