Answer:
WACC	10.42614%
Explanation:
<u>First we use CAPM to solve for the cost of equity</u>
  
risk free	0.04	
market rate  
premium market	(market rate - risk free)	0.08
beta(non diversifiable risk)	1.1	
  
  
Ke	0.12800	
Then we calculate the WACC (weighted average cost of capital)
 
D	80,000 bonsd x 1,000 = 80,000,000 
E	4,000,000 shares x 40 = 160,000,000 
E+ D	80,000,000 + 160,000,000 = 240,000,000
equity weight: 2/3
liability weight: 1/3
Ke	0.128
Equity weight	0.6667
Kd	0.086
Debt Weight	0.3334
t	0.34
 
WACC	10.42614%