A company has the following capital structure: 40% debt, 10% preferred equity, and 50% common equity. The cost of debt is 5%, the cost of preferred equity is 7%, and the cost of common equity is 12%. The corporate tax rate is 30%. Calculate the WACC. Discuss the significance of WACC in capital budgeting and investment decisions. Explain how changes in the cost of debt, cost of equity, or capital structure can affect WACC. Consider the implications of a lower or higher WACC on the company's valuation and investment attractiveness. Discuss the strategic importance of optimizing WACC to balance the cost of capital and risk, and how it influences decisions on funding new projects or investments. Explain how WACC is used to assess the hurdle rate for new projects and compare it to the project's IRR or NPV.