Given the following information, find the Weighted Average Cost of Capital (WACC).

Please assume that the corporate tax rate is 20%. Debt: The firm has bonds that are being traded over-the-counter.

The bonds have a coupon rate of 10 percent per year, 10 years to maturity, make semiannual interest payments, and have a yield-to-maturity YTM of 8 percent per year.

The total market value of the bonds is $2,000,000.

Common Stock: The firm has 100,000 shares outstanding, selling for $40 per share.

The equity beta is 2.

Market: 10 percent market risk premium and 5 percent yield on 10-year government bonds.