Samsung Inc. hired you as a consultant to help estimate its cost of capital (WACC). You have been provided with the following data:

1. Samsung currently has one type of bond outstanding. The bond is making semi-annual coupon payment. It has 20 years left until maturity and is carrying a 7.25% coupon rate. Each bond is currently trading below par at $875. The bond has a total book value of $40 million as indicated on the balance sheet.

2. A typical saving account at a bank is offering an interest rate of 0.75%, GIC is currently offering a return of 1.5% and a 25-year Government of Canada bond is currently yielding at 2.5%.

3. The beta of Samsungs stock is 1.5 and the expected return of the market index such as Korea Composite Stock Price Index is 10.0%.

4. There is currently 20 million shares of Samsung stock trading publicly on the Korean stock exchange. Samsung is expected to pay a dividend of $2.25 per share next year. The actual market price of Samsung Inc. is considered overvalue because the actual return is 11% which is different than the expected return of the stock.

5. The tax rate associated with Samsung Inc. is 30%.

What is the WACC of Samsung Inc.?

please show all calculation steps