15. A firm is conducting a Discounted Free Cash Flow analysis to decide on whether it should start a new project. It will finance this project with 40% debt, 40% common stock, and 20% preferred stock. The debt consists of bonds with 10 years to maturity, with a 5% coupon rate and a 6% yield to maturity (APR). The project's equity cost of capital equals 12%. The preferred shareholders are promised a fixed $2 dividend, and the firm expects to sell the preferred shares for $25. The firm's earnings are expected to grow with 2% each year. The firm faces a 25% tax rate. Estimate the firms weighted average cost of capital (WACC) . 8.20%. b. 8.80%. rwacc=ree+rpsps+rd(1)d c. 8.60%.=0,4re+0.20,1+0,06(10,25 d. 7.90%