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To calculate the Weighted Average Cost of Capital (WACC), we use the formula:

\[
\text{WACC} = \left( \frac{E}{V} \times r_E \right) + \left( \frac{D}{V} \times r_D \times (1 - T) \right)
\]

Where:
- \(E\) is the market value of equity (Weight of Equity in Total Capital Structure)
- \(D\) is the market value of debt (Weight of Debt in Total Capital Structure)
- \(V = E + D\) is the total value of capital (which is 100% in this case)
- \(r_E\) is the cost of equity
- \(r_D\) is the cost of debt (Pre-tax Yield on Debt)
- \(T\) is the tax rate

### Steps:
1. **Calculate the Cost of Equity** using the Capital Asset Pricing Model (CAPM):
   \[
   r_E = \text{Risk Free Rate} + \beta \times (\text{Return on the Stock Market} - \text{Risk Free Rate})
   \]
   
   Substituting the given values:
   \[
   r_E = 3.5\% + 1.3 \times (9.0\% - 3.5\%) = 3.5\% + 1.3 \times 5.5\% = 3.5\% + 7.15\% = 10.65\%
   \]
   
2. **Weight of Debt (D/V)** = 33%  
   **Weight of Equity (E/V)** = 67%

3. **Pre-tax Yield on Debt (r_D)** = 5.0%

4. **Tax rate (T)** = 26.5%

Now, using these in the WACC formula:

\[
\text{WACC} = \left( 0.67 \times 10.65\% \right) + \left( 0.33 \times 5.0\% \times (1 - 0.265) \right)
\]

Let's compute this.The Weighted Average Cost of Capital (WACC) is approximately **8.35%**.

Would you like more details or have any questions? Here are some related questions to explore further:

1. How does an increase in the tax rate affect the WACC?
2. What impact does a higher proportion of debt have on WACC?
3. How is the cost of equity calculated using the CAPM model?
4. Why is the after-tax cost of debt used in the WACC formula?
5. How can WACC influence a company's investment decisions?

**Tip:** A lower WACC generally indicates cheaper access to capital, which can encourage investment.

This detailed guide walks through the calculation of the Weighted Average Cost of Capital (WACC) using data such as beta, risk-free rate, return on stock market, and tax rate. It includes key formulas like CAPM and the WACC formula, essential for finance students and professionals.

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