10: WACC: a) Waccy Ltd has a Return on Equity for the last year of 5.5% and a cost of debt of 4%. The debt is a long term fixed rate loan, and a meeting of the shareholders has established a require RoE for the year ahead of 7%. The Debt/Equity Ratio is 2. What is the Weighted Average Cost of Capital the company should use for the year ahead? b) Waccy Ltd have a proposal to double their debt by issuing a new bond at a cost of 3% pa in interest. This increases the risk for shareholders. The RoE requirements of the shareholders would need to be below what rate for this proposal to lower the WACC for the year ahead