Refer to Exhibit 15

Refer to Exhibit 15.4.The firm is considering moving to a capital structure that is comprised of 40% debt and 60% equity, based on market values.The new funds would be used to replace the old debt and to repurchase stock.It is estimated that the increase in risk resulting from the additional leverage would cause the required rate of return on debt to rise to 7%, while the required rate of return on equity would rise to 9.5%.If this plan were carried out, what would be AJC's new WACC and total value?

A) 7.38%; $800, 008
B) 7.38%; $813, 008
C) 7.50%; $813, 008
D) 7.50%; $790, 008
E) 7.80%; $790, 008