Problem:
TAFKAP Industries has 3 million shares of stock outstanding selling at $18 per share, and an issue of $20 million in 8.0 percent annual coupon bonds with a maturity of 20 years, selling at 102 percent of par. Assume TAFKAP weighted average tax rate is 34 percent and its cost of equity is 13.5 percent.
Required:
Question: What is TAFKAP's WACC?
Note: Please provide through step by step calculations.