The weighted average cost of capital (WACC) is the average cost of the different types of capital employed by the firm. Where wD is the weight of the debt component, wCE is the weight of the equity component. T is the tax rate and after-tax cost of debt component is calculated by multiplying the before-tax cost of debt (kD) by the tax deductibility. Cost of equity component is denoted as kCE in the above equation. The correct answer is E.