A company has a targeted capital structure of 50% debt and 50% equity. Bond (debt) with face value (or principal amount) of $1200.00 paid 12% coupon annually, mature in 20 years and sell for $950.90. The companys stock beta is 1.4, the risk free rate is 9% and market risk premium is 6%. The company has a constant growth rate of 6% and a just paid dividend of $3 and sells at $32 per share. If the companys marginal, tax rate is 35% calculate:

1. What is the WACC using DDM?

2. If the flotation cost of new equity is 10%. What will be the companys cost new equity capital?

3. What would be the companys WACC using the new capital?