The weighted average cost of capital (WACC) is the average cost of the different types of capital employed by the firm and is measured with the equation below:

where wD is the weight of the debt component and 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 B.