Assume a firm has a capital structure of 60% common stock, 10% preferred stock, 30% long term debt. Rates of return required by the holders of each are; common, 10%; preferred, 8%; after-tax debt, 5%. Required 1. Compute the weighted average cost of capital 2. If you know that an additional risk factor for a considered project (a) is 2%, what will be the discount rate that can be used in evaluating the project