Assume that you are an intern with the First Corp., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 21%; the next expected dividend is $0.65 a share; the tip is likely to grow at a constant growth rate of 6.00% a year; the price of the stock is $15.00 per share; and the target capital structure is 45% debt and 55% common equity.

a. What is the firm's WACC, assuming it must issue new stock to finance its capital budget?

b. What is the importance of the WACC to both an investor and also to a company?