calculate the weighted average cost of capital. using the formula in the second slide.

FinCo Ltd has a beta of .85 . The market risk premium is 8%, and Treasury bills are currently yielding 5%. The company's most recent dividend was $1.60 per share. Dividends are expected to grow at 6% annual rate indefinitely. The stock sells for $37 per share. The cost of preferred stock is 6%, the cost of debt is 8%. The relevant tax rate is 35%. FinCo Ltd has a target capital structure of 60% common stock, 10% preferred stock, and 30% debt. Weighted average cost of capital formula WACC=(VERe)+(VDRd(1Tc))=marketvalueofthefirmsequityD=marketvalueofthefirmsdebtTC=corporatetaxrateRe=costofequityRd=costofdebt=E+D