Calculate the weighted average cost of capital for Limp Linguini Noodle Makers Inc. under the following conditions:

*The capital structure is 40% debt and 60% equity.

*The before-tax cost of debt (which includes flotation costs) is 20% and the firm is in the 40% tax bracket.

*The firms beta is 1.7.

*The risk-free rate is 7% and the market risk premium is 6%. (8 Marks)