Based in Winnipeg, Manitoba, Defence Electronics Inc. (DEI) was founded to provide security systems, facilities controls and related services. DEI established a solid reputation for quality and the business grew thanks to strong relationships with large, long-term customers in Canada and the United States. The Research and Innovation Group (RIG) is the development side of the company. They are considering a new contract that will strain resources for not only RIG, but the entire company. With an upfront cost of $11.0 million, managers understand that the cost of capital will be a key part of maintaining and improving Clearview's competitive edge. You have been asked to calculate the company's weighted average cost of capital (WACC), based on the following information. Over the last five years the annual dividends on the firm's common stock have grown at 5.00 percent per year and this growth is expected to continue indefinitely. A common share dividend of $2.080 per share was recently paid. Common shares trade at $79.000 per share. The company has authorized 471,000 common shares, with 433,000 common shares issued and outstanding. The company has issued 149,000 of the 158,000 preferred shares authorized. The annual preferred share dividend is $2.430 per hare. The latest preferred share price is $56.200 per share.