Weighted average cost of capital. Suppose your firm has five sources of funding. They are as follows:

55 400,000 shares of stock currently selling at $12.33 per share. The firm has experienced an average growth rate of 4% for the past 50 years, and they expect this to continue indefinitely. Their next dividend will be

$1.23.

55 100,000 shares of preferred stock that pay an annual dividend of 3% of face value, which is $25. They are currently selling for $18.77.

55 3,400 corporate bonds currently selling at $1,223.90 and yielding 6.54%.

They have 13 years left until maturity and a coupon rate of 9.15%.

55 1,945 corporate bonds currently selling for $884.44. They have a coupon rate of 7.36% and 14 years left until maturity. The bonds have a current yield to maturity of 8.83%.

55 A bank loan of $1,000,000. The interest rate on the loan is 7.5%.

55 Your firm has a tax rate of 21%. What is your firm’s WACC?