A company has $10$ million of $5$ year $5\%$ coupon bonds outstanding which are trading at $104,$ with a yield of $4\mathrm{.}10\%.$ Their shares are

trading at $45$ per share, and there are $200,000$ shares in issue. The beta of the firm is $1\mathrm{.}1,$ the risk free rate is $3\%$ and the market risk

premium is $8\%.$ The corporate tax rate is $35\%.$ What is the weighted average cost of capital for this firm? Why would the firm and

investors calculate the WACC?