GSI currently has existing debt on the balance sheet with an average coupon rate of 7% that has a current market value of $25 million. GSIs debt is rated BB and currently BB bonds are yielding an effective annual return of 9% (that is, their YTM is 9%). GSI has 1,000,000 shares of stock outstanding and the book value of equity is $60 million and its current stock price is $75 per share. The current risk free interest rate for ten year Treasury bonds is 4%. The consultants from McKinsey and Co tell you that the S&P 500 is expected to have a return of 11% per their latest survey of CFOs. GSI has a beta of 1.4.

(11% discount rate, compute the WACC)