Choice America Bank has the following capital allocation. The firm's CFO is considering an increase or decrease in one or multiple capital sources. Assume no flotation cost per security $($bond$,$ common stock and preferred stock$),$ please calculate the after$-$tax cost of capital for each and the total combined, or Weighted Average Cost of Capital. Please be sure to use $3$ decimal places in your calculations and you may complete on Word, Excel, or PDF$.$ For Common Stock, you may use either the dividend growth model or CAPM.

Source of Capital

Bonds $,250,000,000$

Common Stock $150,000,000$

Preferred Stock $25,000,000$

Capital Source Proportion $($or Weight$)$

Cost per

Details

Amount of Capital

Source

Average Cost of Capital per Source

$7$ year Maturity, $4\mathrm{.}5\%$

Annual Coupon Rate for $$1,000$ Face Value,

Bond Price $$942,18\%$

Tax rate

$$58\mathrm{.}50$ Market Price Per

Share, $8\%$ Growth, $1\mathrm{.}58$

Beta, $4,5\%$ Market Risk

Premium, $5\%$ Risk Free

Rate, $$1\mathrm{.}05$ Dividend

Per Share

$$1\mathrm{.}25$ Dividend Per

Share, $$20$ Par Value

Enter

Weighted

Average Cost

of Capital