PS 31:

Caspian Sea Drinks' is financed with 69.00% equity and the remainder in debt. They have 12.00-year, semi-annual pay, 5.40% coupon bonds which sell for 98.43% of par. Their stock currently has a market value of $24.43 and Mr. Bensen believes the market estimates that dividends will grow at 3.95% forever. Next years dividend is projected to be $2.11. Assuming a marginal tax rate of 29.00%, what is their WACC (weighted average cost of capital)?