WACC

The Pawlson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 9%, and its marginal tax rate is 40%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,194. The firm has 576 shares of common stock outstanding that sell for $4.00 per share.

Assets Liabilities and Equity

Cash 120 Accounts Payable and accrual 10

Account Receivable 240 Short Term Net 54

inventories 360 Long Term Debt 1,140

Plant and Equipement 2,160 Common Equity 1,676

Total Assets 2,880 Total Liabilities/ Equity 2,880

Calculate Pawlson's WACC using market-value weights. Round your answer to two decimal places. Do not round your intermediate calculations.