Marshall Industries Limited is a large publicly listed company and is the market leader in vacuum cleaner manufacturing in New Zealand. The company is undertaking a six-year project to set up a manufacturing plant overseas to produce a new line of commercial vacuum cleaners. The company bought a piece of land four years ago for $8 million in anticipation of using it for its proposed manufacturing plant. If the company sold the land today, it would receive $ 9.75 million after taxes. In six years, the land can be sold for $14 million after taxes and reclamation costs. The manufacturing plant will cost $275 million to build. The following market data on Marshall Industries Ltd are current: $120,000,000,7.25% coupon bonds outstanding with 20 years to maturity redeemable at par, selling for 95 per cent of par; the bonds have a $1000 par value each and make semi-annual coupon payments 15,000,000ordinary shares, selling for $55 per share 12,000,000 shares (par value $ 10 per share) with 6.5% dividends (after taxes), selling for $32 per share Debt Equity Non-redeemable Preference shares The following information is relevant: Marshall Industries Limited's tax rate is 28% The company had been paying dividends on its ordinary shares consistently. Dividends paid during the past six years is as follows Year (-5) ($) Year (-4) ($ Year (-3) () Year (-2) ($) Year (-1) (S) Year (0) ($) 5.0 5.3 6.0 4.5 4.7 5.5 The project requires $ 8.25 million in initial net working capital investment in year zero. Questlon Compute the weighted average cost of capital (WACC) of Marshall Industries Ltd. Show all workings and state any assumptions underlying your computations