Use the Following Information to Answer the Next Question

Use the following information to answer the next question:
Operating assets = $3,000
Operating liabilities = $1,000
Book value of debt = Market value of debt = $1,500
Book value of equity = $500
Market value of equity = $900
Value of operating leases = $2,000
After-tax required return on unsecured debt = 6%
Required return on equity (CAPM ) = 13%
After-tax required return on secured debt = 5%
-What are (1 ) the WACC before adjustment for leases and (2 ) the WACC after adjustment for leases?

A) WACC before adjustment for leases = 8.63 percent;WACC after adjustment for leases = 6.98 percent.
B) WACC before adjustment for leases = 6.63 percent;WACC after adjustment for leases = 6.98 percent.
C) WACC before adjustment for leases = 6.93 percent;WACC after adjustment for leases = 8.63 percent.
D) WACC before adjustment for leases = 8.63 percent;WACC after adjustment for leases = 8.98 percent.

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