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Luther Industries has an equity value of $450 million and $150 million in outstanding debt

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Luther Industries has an equity value of $450 million and $150 million in outstanding debt. Suppose Luther's equity cost of capital is 13%, its debt cost of capital is 7%, and the corporate tax rate is 40%.

Luther's weighted average cost of capital is closest to:

Select one:

a.11.5%

b.10.8%

c. 9.8%

d.13.0%