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A company has:   • $6 million market value of equity   • $4 million market value of debt    •...

A company has:

   • $6 million market value of equity

   • $4 million market value of debt 

   • WACC of 11.04%

   • Corporate income tax rate of 20%

According to Modigliani and Miller's theory of capital structure with tax, what is the ungeared cost of equity?

A.

12.00%

B.

10.16%

C.

16.24%

D.

12.54%

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