A firm has a capital structure with 45% debt, 5% preferred, 50% common

New bonds will have an 8% coupon

Common shares currently sell for $25.00

Preferred shares currently sell for $75.00

The most recent common dividend was $2.00

The most recent preferred dividend was $7.50

Flotation costs of 10% would be required to issue new common stock

Flotation costs of $10 would be required to issue new preferred stock.

The firm's tax rate is 35%

Net income is projected to be $1,000,000 next year

The equity portion can be supplied internally

The payout of dividends will be 35% of net income

The firm is expected to grow at 4% for the foreseeable future

Calculate their WACC