Problem:
TAFKAP Industries has 8 million shares of stock outstanding selling at $17 per share and an issue of $20 million in 7.5 percent, annual coupon bonds with a maturity of 15 years, selling at 109 percent of par ($1,000).
Required:
Question: If TAFKAP's weighted average tax rate is 34% and its cost of equity is 12.5 percent, what is TAFKAP's WACC?
Note: Please show the work not just the answer.