Company Unlimited would like to evaluate its new project. Here's the information known about the project:

	It will be a 6-year project
	The company is in 38% tax bracket for all purposes
If no loan is used	The initial investment will equal $1,000,000
Every year the after-tax cash flow will equal $130,000
Equity Beta equals 1.3
Required return on equity equals 11.3%
If loan is used	An interest-only riskless loan will cover 30% of the initial investment

Here's additional information about the market:

Treasury bill rate is a proxy for the riskless asset, and the annual rate equals 3.5%

Expected return on the market portfolio equals 9.5%

HINTs: You will not need to use some of the numbers that are given in this problem. If needed, for debt-to-equity ratio calculations, use the easier debt-to-BOOK-value-of-equity method rather than the harder debt-to-MARKET-value-of-equity method.

Company Unlimited company would like to use the Weighted Average Cost of Capital (WACC) approach to evaluate this project which it will finance with both equity and debt. In the table below, fill out the WACC values!

weight of levered equity	X	Cost of levered equity	+	(1	Tc	)	X	weight of debt	X	Cost of debt
12345678910		12345678910			12345678910			12345678910		12345678910
1 --- 30% 2 --- 35% 3 --- 40% 4 --- 45% 5 --- 50% 6 --- 55% 7 --- 60% 8 --- 65% 9 --- 70%		1 --- 6.50% 2 --- 7.90% 3 --- 8.30% 4 --- 10.00% 5 --- 10.60% 6 --- 11.04% 7 --- 11.30% 8 --- 12.41% 9 --- 13.37% 10 --- 18.91%			1 --- 20% 2 --- 28% 3 --- 30% 4 --- 38% 5 --- 40%			1 --- 30% 2 --- 35% 3 --- 40% 4 --- 45% 5 --- 50% 6 --- 55% 7 --- 60% 8 --- 65% 9 --- 70%		1 --- 3.00% 2 --- 3.50% 3 --- 4.00% 4 --- 4.50% 5 --- 5.00% 6 --- 5.50%

The numeric answer for WACC is 12345678910. From the table below, pick a number that corresponds to your answer:

1	5.72%
2	7.14%
3	8.70%
4	9.12%
5	10.01%