Scenario You have accepted a job offer and just started working for Walter White Chemicals (WWC) Co. Ltd., a medium sized publicly traded company that offers production of plastics, chemicals, and agricultural products for its customers. Your boss tells you that your first job is to conduct a financial analysis to determine the most WWC should pay to acquire a new production line in Albuquerque, NM. The new production line is expected to generate cash flows of $1.5 million per year over the next ten years. WWC's cost of equity capital is 14 percent and its cost of debt is 5 percent on an after-tax basis. The firm's capital structure consists of $100 million in equity and $150 million dollars in debt.

Question:

Calculate the WACC for WWC. Show all your work!