Caspian Sea Drinks' is financed with 63.00% equity and the remainder in debt. They have 12.00-year, semi-annual pay, 5.27% coupon bonds which sell for 98.40% of par. Their stock currently has a market value of $24.01 and Mr. Bensen believes the market estimates that dividends will grow at 3.08% forever. Next years dividend is projected to be $2.35. Assuming a marginal tax rate of 20.00%, what is their WACC (weighted average cost of capital)?

Caspian Sea Drinks is considering the purchase of a new water filtration system produced by Rube Goldberg Machines. This new equipment, the RGM-7000, will allow Caspian Sea Drinks to expand production. It will cost $13.00 million fully installed and will be fully depreciated over a 15 year life, then removed for no cost. The RGM-7000 will result in additional revenues of $3.13 million per year and increased operating costs of $671,708.00 per year. Caspian Sea Drinks' marginal tax rate is 34.00%. The internal rate of return for the RGM-7000 is _____.