Rapid Construction has 500,000 shares of common stock outstanding at a market price of $31 a share. Last month, Rapid Construction paid an annual dividend in the amount of $1.0 per share. The dividend growth rate is 6%. Rapid Construction also has 10,000 bonds outstanding with a face value of $1,000 per bond. The bonds carry a 5% coupon, pay interest annually, and mature in 10 years. The bonds are selling at 102% of face value. The company's tax rate is 34%. What is Rapid Construction's weighted average cost of capital?
a) 5.98%
b) 6.51%
c) 6.92%
d) 7.38%
e) 7.65%