1. Zorro Enterprises common stock has a Beta = 1.2. The expected return on the Market Portfolio is 14%, and the risk-free rate is 3.0%. Zorro also has an outstanding bond that pays interest semi-annually, with a $1,000 face amount, a 4% coupon rate, matures in exactly 10 years, and is currently selling for $995. Zorro's balance sheet shows 60,000 of debt, and $40,000 of equity. What is Zorro's Weighted Average Cost of capital (WACC)?

WACC = __________________________________