Cost of Capital
 A company has the following capital structure:
oDebt: $5,000,000 with an interest rate of 6%
oPreferred Stock: $2,000,000 with a dividend rate of 8%
oEquity: $8,000,000 with a required return of 12%
Requirements:
1.Calculate the Weighted Average Cost of Capital (WACC).
2.Assess the impact of a 2% increase in the cost of debt on WACC.
3.Determine the new WACC if the company issues an additional $1,000,000 in equity.
4.Analyze how changes in the capital structure affect the overall cost of capital.