Quinlan Enterprises Stock Trades for $52

Quinlan Enterprises stock trades for $52.50 per share.It is expected to pay a $2.50 dividend at year end (D? = $2.50) , and the dividend is expected to grow at a constant rate of 5.50% a year.The before-tax cost of debt is 7.50%, and the tax rate is 40%.The target capital structure consists of 45% debt and 55% common equity.What is the company's WACC if all the equity used is from reinvested earnings?

A) 7.07%
B) 7.36%
C) 7.67%
D) 7.98%
E) 8.29%