Brook$$s Window Shields Incorporated is trying to calculate its cost of capital for use in a capital budgeting decision. Mr$.$ Glass, the vice president of finance, has given you the following information and has asked you to compute the weighted average cost of capital.

The company currently has outstanding a bond with a $11\mathrm{.}0$ percent coupon rate and another bond with a $8\mathrm{.}0$ percent coupon rate. The firm has been informed by its investment banker that bonds of equal risk and credit rating are now selling to yield $12\mathrm{.}0$ percent.

The common stock has a price of $$98$ and an expected dividend $($D$1)$

of $$5\mathrm{.}40$ per share. The firm's historical growth rate of earnings and dividends per share has been $13\mathrm{.}0$ percent, but security analysts on Wall Street expect this growth to slow to $12$ percent in future years.

The preferred stock is selling at $$94$ per share and carries a dividend of $$7\mathrm{.}60$ per share. The corporate tax rate is $30$ percent. The flotation cost is $3\mathrm{.}2$ percent of the selling price for preferred stock. The optimum capital structure is $40$ percent debt, $5$ percent preferred stock, and $55$ percent common equity in the form of retained earnings.

Compute the cost of capital for the individual components in the capital structure.

Note: Do not round intermediate calculations. Input your answers as a percent rounded to $2$ decimal places.

Calculate the weighted cost of each source of capital and the weighted average cost of capital.

Note: Do not round intermediate calculations. Input your answers as a percent rounded to $2$ decimal places.