1)You are looking to invest in a company and have collected some information from its financial statements.The tax rate for the company is 25%.The company has 150,000 semi-annual bonds outstanding with a face value of $1,000 and a coupon rate of 5%.The bonds will mature in exactly 20 years.In addition, the company has the following information in its Statement of Equity:

-Common Shares: 1,000,000 shares outstanding; authorized for 1,500,000 shares, $15,000,000

-Preferred Shares; 250,000 shares outstanding, 5% cumulative, $25,000,000

You have also collected some market information.The common shares current sell for $95 per share, it pays a 3.5% dividend that it increases by 2% per year and the Beta of the stock is 1.2.The bonds currently sell for $703 per bond.The preferred shares currently sell for $105 per share.A GIC (risk-free) is 2.5% and the market risk premium is 7%.

Calculate the Weighted Average Cost of Capital (WACC) for the company.Why is knowing a company's WACC important when investing?