(10 marks) Lululemon Athleticas share is currently trading at $320, and its market capitalization is $42 billion. The firm's beta is 1.33, the risk-free rate is 2.4%, and the market risk premium is 5.5%.

The firm has annual-pay 8% coupon bonds outstanding which mature in 10 years with a book value of $5 billion. The bonds trade at 120% of the face value.

The firms tax rate is 35%.

What is Lululemon's WACC?

What would Lululemons WACC be if it were an unlevered firm (that is has no debt)?