7. (12 points) The managers of B2B Solutions Inc. are evaluating a project for the new year. They know the potential costs and revenues involved, but aren't sure of how to discount the relevant cash flows. They approach you and ask you to calculate the weighted average cost of capital. They provide you with the following information for the calculations: Common Stock The firm has 100,000 shares of common stock. The stock last traded at $20. The risk free rate is 6%. The stock has a beta of 1.2 and the market risk premium is 5%. . Bonds The firm has 1500 bonds outstanding, each of a face value $1000. The bonds currently trade at $1015.24 and yield 8%. Bank Loan The firm also borrowed $525,000 from Citibank at a variable rate of 0.45% above the prime lending rate. However, Citibank recently sold the loan to Chase Manhattan for $515,000 (so that Chase Manhattan is now the lender). Chase has informed you that similar loans now are issued at 0.25% above prime. The prime interest rate is currently 6.5% The firm has a marginal tax rate of 34%