Given the following information, find the Weighted Average Cost of Capital (WACC). Please assume that the corporate tax rate is 20%.

Debt: The company has no traded debt, but it has raised private debt (i.e., bank loans). The average interest rate on its existing bank loans is 5%. The book value of its total debt is $3,000,000. The company has a credit rating of B+. The default spread (credit risk premium) for a firm that is rated B+ is 3 %.

Common Stock: 100,000 shares outstanding, selling for $50 per share, the equity beta is 2.

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

WACC=ReE+DE+Rd(1t)E+DD