Answer : WACC = 14.39%

Working notes for the above answer is as under

stock has a beta of 1.45,

Treasury bills yield 5%,

the market portfolio offers an expected return of 14%

firm finances 30% of its assets with debt so remaining 70 % is equity

yeild to maturity of 9%.

the firm is in the 35% marginal tax bracket.

Now we will put all this figure in the formulla

WACC = r(E) × w(E) + r(D) × (1 – t) × w(D)

First of all we will find return on equity

re= 0.05 + 1.45 (0.14-0.05)

=0.05+ 0.1305

=0.1805

Now we will put these figure in the formulla

WACC=

0.3 * (1- 0.35) * 0.09) + (0.7 *0.1805)

=0.01755+ 0.12635

=14.39%