Ex.: Big Oil has the following sources of financing. What's the WACC of Big Oil? - A bank loan of $200m (interest =7% ). - 12 -year 8% per year coupon (paid annually) bonds of face value $200m and YTM of 9%. - 100m shares of par value $1, trading at a current price of $12/ share. - Retained earnings of $300m. - Assume =0.85 for firm's stock, risk-free rate of 6%, market premium of 9%, and tax rate of 35%