Consider a company called Wacco with a capital structure that consists of bonds, preferred stock and common stock. The bonds have a rating of BBB, a face value of $50m, an annual coupon payable at the rate of 8% and mature in 9 years. Any new issue of bonds would be purchased by the underwriter at $975 each. Current yields are 6.5%. The preferreds of which there are 400,000 outstanding are current priced at $30. The annual dividend is $1.75. Flotation expenses on a new issue would be 4%. There are currently 4.0 million common shares outstanding priced at $17.50. The somewhat risky shares will pay an annual dividend of $0.32 in the next year. With growth anticipated at 9% for the foreseeable future. At the current time Wacco' cash flow from its operations is more than adequate for any capital projects. Wacco' tax rate is 30 percent. Calculate the Wacco' WACC based on market values. 1. What is the market value of debt? 2. What is the after tax cost of debt? % 3. What is the cost of preferred stock? % 4. What is the cost of common stock? % 5. What is the weighted average cost of capital? %