Monch PLC has just issued debentures with an 8% interest rate and which are currently yielding a return of 5.0% before-tax. The company's cost of equity finance is 10.3%, and Monch has estimated its weighted average cost of capital (WACC) to be 7.5%. It is deciding whether to lease or buy a new machine. It is currently in a tax-exhaustive position but is usually liable to pay corporation tax at a rate of 19% per annum. Which of the following should Monch PLC use as the discount rate in its lease/buy decision-making process?

a. 5.0%
b. 7.5%
c. 10.3%
d. 4.1%