Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project:

The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million

The firm must determine the cost of capital to evaluate the project. (The project is within the firms normal activities)

Ramblin Wreck, Inc. Financial Data:

STOCK DATA: BOND DATA: Current Price Per Share$30.00Current Price Per Bond$940.00# of Shares2.00 million# of bonds20,000.00Book Value$50 millionAnnual Coupon Rate8.00% Face Value Per Bond$1,000 Maturity10 years

The risk free rate in the economy is currently 2.00%, while investors have a market risk premium of 8.00%. Ramblin Wreck, Inc. has a beta of 1.44. The tax rate is 38.00%.

What is the WACC for the project?