A company has the following financial structure: Bank liabilities 30,000 Obligations payable 80,000 Common capital 120,000

The bank liability is a revolving loan maturing monthly and has an interest rate of 15% per year. Interest is charged at the end of each month on the average monthly balance, which is estimated to be equal to the current balance. The bank asks for a reciprocal balance of $ 2,000 and account management fees of $ 200 are charged monthly along with interest.

Obligations payable are with zero coupon and with a term of 5 years. At the time of placement, it is estimated that he will receive $ 80,000 and pay processing fees of $ 3,000. Upon maturity, the face value of $ 100,000 must be paid.

The company's dividend policy is to award $ 3 per share and increase it 7% annually. The share price is currently $ 12.

a) What is the cost of each of the financing sources.

b) If the tax rate is 30%. What is the weighted average cost of capital net of taxes.