1. Company Y has 80 bonds outstanding that are selling at their par value of $1,000 each. Bonds with similar characteristics are yielding a pre- tax 8.0 per cent. The firm also has 5,000 shares of common stock outstanding. The stock has a beta of 1.4 and sells for $50 a share. The U.S. T-bill is yielding 5 per cent, the market risk premium is 6 per cent, and the firm's tax rate is 29 per cent. What is the firm's weighted average cost of capital assuming its earnings are sufficient to classify all interest as a tax-deductible expense?