kmf229

I would have calculated to get the answer as follows:
Kd=Yield x (1Tax)
Kd=10% x (.6)=6%
Po=(Do x (1+g))/(Keg)
((Do x (1+g))/Po) + g=Ke
(($3 x (1.05))/31.5) + g=15%
Kd=6%
Ke=15%
D/E=.5 Wd=.5 We=.5
WACC= .5(6) + .5(15)=10.5% to get B and it would have been the wrong answer.
Please explain why you used Wd = .33333 & We = .66667.
Thanks!