Calculate the Weighted Average Cost of Capital for the firm. You are to assume that the Capital Asset Pricing Model is to be used for the cost of equity.

Firm Beta Risk-Free Rate Market Risk Premium Firm Tax Rate Dividend at end of the year Current Common Stock Price Expected Dividend Growth Number of Common Shares Outstanding Number of Preferred Shares Outstanding Preferred Price Per Share Preferred Stock Dividend 1.15 1.25% 5.90% 35% $1.10 $14.82 1% 3,000,000 300,000 $20.00 $1.20 Face Value Annual Coupon Rate Current Market Price Years Remaining Payments Bond A Details $1,000 7% $1,104.52 9 Semi-Annual Face Value Annual Coupon Rate Current Yield to Maturity Years Remaining Payments Bond B Details $1,000 6% 5.10% 19 Annual Book Value Balance Sheet in millions) Cash and Short-Term Securities $ 10 Accounts Receivable Inventories Plant and Equipment Total $ $ $ 5 7 28 50 Bonds* $ 20 (40% Bond A, 60% Bond B) Preferred Stock $ 5 Common Stock $ 15 Retained Earnings $ 10 Total $ 50 $ *Assume that all bonds are listed at face value on the Book Value Balance Sheet