BF is looking to expand its existing operations. Prior to investment decision, BF must determine its appropriate discount rate. The following information relates to BF existing (book value) capital structure.

-Debentures (Original Maturity 18 years) $20,000,000

-Preferred Shares: $4,000,000

-Retained Earnings: $18,000,000

-Total: 50,000,000

The yield on 91-day Government of Canada Treasury Bills is currently 11.78%. The debentures, which have been outstanding for three years, have a coupon rate of 14%. Current market yields on this risk security are currently about 12.5%. Floatation costs would be 2% of the issue price.

The common shares, of which there are 5 million outstanding, are currently priced at $5 per share/ The current dividend is $0.10 per share. BH's beta is 1.2 and its projected growth rate is 16% annually. Floatation expenses would be 5% of the existing share price.

Assuming a tax rate of 41%, calculate the WACC using market value weightings