Problem:
Calculate the WACC for Tango INC given the following capital structure information: debt financing of $2 million, at 8% interest, and common stock financing of $1million at 11%. Tango's Effective tax rate is 40%
A) 4.22%
B) 7.64%
C) 6.86%
D) 8.12%
Note: Provide support for your rationale.