3. Very Busy Airlines has the following capital structure: Debt $40,000,000 Preferred Stock Common Stock Additional info: $10,000,000 $50,000,000 Yield to maturity (bonds) Price of preferred stock Price of common stock $6 $2 10% $50 $42 Preferred dividend Common dividend Flotation cost, common Growth rate of dividends 5% The firm's tax rate is 25%. Compute the firm's weighted average cost of capital [WACC]. (10) [Hint: First compute weights for debt, preferred stock, and common stock in the capital structure. Then compute their respective component costs. Finally compute the WACC). $2