Capital Asset Pricing: XYZ Inc. has the following information:

Total Market Value of Long-Term Debt: $900,000; Weight 37%

Total Market Value of Preferred Stock: $30,000; Weight 1.2%

Total Market Value of Common Stock: $1,500,000; Weight 61.7%

Tax Rate= 21% YTM on Bonds= 7.8%

Annual Preferred Dividend= $4.75

Preferred Stock Price= $41

Flotation Costs on Issuance of New Preferred Stock= 4%

Next Years Expected Common Stock Dividend= $2.25

Current Common Stock Price= $49

Expected Dividend Growth Rate= 6.5%

1) Compute the cost of preferred stock

2) Compute the cost of common stock

3) Compute the Weighted Average Cost of Capital (WACC)