Assume the following information for a company:

There are 5 million ordinary shares. Analyst consider it normal to double your money in four years in this industry. The share last traded at $9 per share.

-An overdarft of $20 million attracts an interest rate of 30% pa compounded monthly.

-90-days bank bills have just been issued with Face Value of $20m and a yield of 12% pa.

-Bonds exist with a total face value of $30m, a market value of $30m, a coupon of 2% pa paid semi-annually and a 10 years to maturity.

- The company account show $5m in retained earnings and $2m in trade credit ( accounts payable).

-The corperate tax is 30%

Calculate the Weighted average cost of capital on an after-tax basis. What limitations apply to the use of this WACC?