Sunshine Corp hired a new CFO and changed firm's policy from zero leverage to some leverage. They decided to add enough leverage till the firm value increased by 20%. Assume cashflows are level perpetual.

Use data below:

Risk Free Rate=5%

Market Return=12%

Unlevered Beta=1.5

Unlevered Cost of Capital=15.5%

Find Sunshine's WACC with leverage

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Part 1

Sunshine's WACC with leverge is ?

enter your response here%

(Round

to two

decimals)

Use 99 if the answer is indeterminate