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ABC firm is selling bonds for $950 a bond with $1,000 par value at 5% coupon paid annually. The bond will mature in 8 years.

ABC firm is selling bonds for $950 a bond with $1,000 par value at 5% coupon paid annually. The bond will mature in 8 years. Firm is selling 10,000 such bonds. This firm is also selling preferred stock at $75 per share. Firm is selling 100,000 such shares at 8% dividend with $100 par value. This firm is also raising money by selling another issue of common stocks. The most recent dividend was $4.50 and this firm is expecting to grow at 7% rate per year forever. The current selling price of their stock is $60 and company is planning to sell 300,000 shares. Estimate Weighted Average Cost of Capital (WACC). This firm is in 40% tax bracket.

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