Brooks 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 12.2 percent coupon rate and another bond with a 9.5 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 13.4 percent. The common stock has a price of $58 and an expected dividend (D1) of $5.30 per share. The firms historical growth rate of earnings and dividends per share has been 9.5 percent, but security analysts on Wall Street expect this growth to slow to 7 percent in future years. The preferred stock is selling at $54 per share and carries a dividend of $6.75 per share. The corporate tax rate is 25 percent. The flotation cost is 2.1 percent of the selling price for preferred stock. The optimum