11. The Herbert Sherbet Company has this book value balance sheet: Cash Inventory Fixed assets $30,000,000 10,000,000 20,000,000 Current liabilities $18,000,000 Long-term debt 12,000,000 Common equity Common stock (1 million shares) 1,000,000 Retained earnings 29,000,000 Total assets $60,000,000 Total claims $60,000,000 The current liabilities consist entirely of notes payable to banks, and the interest rate on this debt is 10 percent, the same as the rate on new bank loans. The current liabilities will be paid off with cash in two weeks and not renewed thereafter. The long-term debt consists of 12,000 bonds, carries an annual coupon interest rate of 12 percent, and matures in 20 years. The bonds pay coupons quarterly. The going rate of interest on new long-term debt is 8 percent, and this is the present yield to maturity on the bonds. The common stock sells at a price of $45 per share. The common stock has a beta of 1.2. The current rate of return on Treasury bonds is 3.2% and the return on the market is 14%. Find Herbert Sherbet's weighted average cost of capital (WACC) if the tax rate is 25%