1.Given the following information, calculate the weighted average cost of capital (WACC) for ANDI Construction Inc.

Percent of capital structure:

Preferred stock................. 10%

Common equity............... 40

Debt................................. 50

Additional information:

Corporate tax rate.............................. 35%

Dividend, preferred........................... $7.00

Dividend, expected common............. $1.25

Price, preferred.................................. $85.00

Growth rate........................................ 8%

Bond yield......................................... 4.5%

Flotation cost, preferred.................... $1.75

Price, common................................... $48.00