2. A corporation wishes to raise capital for a major expansion. It wants to estimate what its Weighted Average Cost of Capital (WACC) will be. This together with other expense projections versus revenue expected, will determine if the expansion is economically sensible. The company decides to borrow 20 million from its bank. The terms will be 4% per year compounded quarterly. It will borrow 30 million using preferred stock with a 12.00 annual per share dividend rate paid on a per share cost of 90 dollars. The cost of selling the preferred stock is 3.00 per share because of its complexity of issuance and distribution. It will issue 100 million in common stock, the price per share is 6.00 dollars with estimated earning per share of 45 cents on an annual basis. It will use 35 million in retained earnings to complete the financing, The estimated income tax rate is taken to be 40% (which includes federal, state and local taxes). What is its WACC? You must show all intermediate steps for full credit on this problem. 2. A corporation wishes to raise capital for a major expansion. It wants to estimate what its Weighted Average Cost of Capital (WACC) will be. This together with other expense projections versus revenue expected, will determine if the expansion is economically sensible. The company decides to borrow 20 million from its bank. The terms will be 4% per year compounded quarterly. It will borrow 30 million using preferred stock with a 12.00 annual per share dividend rate paid on a per share cost of 90 dollars. The cost of selling the preferred stock is 3.00 per share because of its complexity of issuance and distribution. It will issue 100 million in common stock, the price per share is 6.00 dollars with estimated earning per share of 45 cents on an annual basis. It will use 35 million in retained earnings to complete the financing, The estimated income tax rate is taken to be 40% (which includes federal, state and local taxes). What is its WACC? You must show all intermediate steps for full credit on this