BLACKFRIDAY company is planning an expansion of its existing production capacity. The firm hired you as a consultant for the expansion project. Since you are a savvy project manager, you first decided to estimate the firms cost of capital based on the available data. Data: Tax Rate: 40% Bond: Coupon rate 12%, Maturity Years 15, Present value $1150 Preferred Stock: Dividend rate 10%, Par Value $100, Present Value $111 Common Stock: Market price $50, D0=$4.20, Dividend growth 5%, Beta 1.2, Treasury Bond yield 7%, Market risk premium 6%. When the firm uses Bond-yield+Premium method, the risk premium is 4%. Capital structure of BLACKFRIDAY is as follows; Debt 30%, Common Equity 60%, Preferred Stock 10% What are the components of the WACC you calculated above to be blamed for higher WACC? What can be done to reduce the WACC further?