1. (10 points) Copper Creek Industrial is in the process of expanding and raising new capital through an initial public offering of common equity. The company has a target capital structure consisting of a debt to value (w.) ratio of 35%. A current debt issue has a face value of $1,000 and annual coupon of 7.60% which is paid semi-annually. It has 20 years remaining to maturity and it currently sells for $1,035. Flotation costs of the new issue of stock are expected to be 5%, and using the pure play method with similar firms the stocks beta is estimated at 1.30. The investment bank believes the stock can sell at $25 per share. The company is expected to pay a dividend of $1.00 next year and it should grow at 7% per year indefinitely. If the tax rate is 34%, what is the weighted average cost of capital