Charlies Computer Correction Connection (C4) runs a chain of computer repair franchises. C4s stock sells for $36 per share and has 100,000 shares outstanding. C4 just paid annual dividend of $2 per share and expects the growth rate to be 5% annually. C4 also has 500 bonds outstanding, maturing in 6 years with a face value of $1,000 each. The bonds have a 7% annual coupon rate (make annual coupon payments) and currently sell for $1,090. The tax rate is 30%. What are C4s cost of equity and cost of debt (before tax)? What is C4s WAAC?

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