ABC Industries is considering expanding their facilities. As part of the decision process, ABC is calculating its weighted average cost of capital (WACC). Your assignment is to calculate the company's WACC based on the following information: 1. The firms' tax rate is 22%. 2. The current market price of ABC s outstanding bonds is 107% of their $1,000 par value. The bonds have an annual coupon rate of 6.4% and make coupon payments semiannually. The bonds mature in 15 years. 3. The current price of the firm 's preferred stock is $86,00 per share. The stock has a $100 par value and a 4.4% annual dividend rate (paid annually). 4. The current price of the firm's common stock is $76.50 per share. Its next (upcoming) semiannual dividend will be D1=$3.80 per share. Dividends are paid semiannually and are expected to grow at an annual rate of 5% into the foreseeable future. NOTE that $3.80 is the amount of the semiannual dividend. It does not need to be divided by two. 2021 Balance Sheet (thousands of dollars) Problem #2 Refer to the information concerning ABC Industries in problem #1. In discussions with the company's CEO, you learn that a decision has been made to eliminate future dividends on the company's common stock. This means that, since your estimate of the cost of common equity was based on the Discounted Cash Flow Method and a forecast of future dividend payments, your previous estimate of WACC is incorrect. It will be necessary to recalculate the cost of common equity using the Capital Asset Pricing Model (CAPM). Research shows you the following: Further, the beta for the company is: ABC+1.45 A. Use the CAPM to estimate the company's cost of common equity. B. Recalculate the company's WACC using the new estimate of cost of common equity