2. You are a financial analyst for Williams Enterprises, and you must estimate the appropriate discount rate for the company's upcoming projects. You have the following information about the company: the firm is financed with equal shares of debt and common equity and 10% preferred stock. Williams has outstanding bonds with 6 years left to maturity and an annual coupon of 7%, paid semiannually. The bonds currently trade for $953.07. In addition, the company has outstanding preferred shares with a par value of 5100 and stated annual dividend rate of 8% that are currently trading for $72,70. The firm's common equity will derive fully from retained camnings and no new common shares will be issued. Your team provides you the following information: The company has a beta of 1.25 the risk-free rate is 29 the market risk premium is 8% and the company's common stock is risky enough that it commands a premium of 3% over the company's debt. If the firm faces a flat state-plus-foderal tax rate of 25%, what is Williams' cost of capital