Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target copital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its futur projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used t chlculate the firm's welghted sverage cost of capital (WACC). If the firm will not have to issue naw common stock, then the cost of retained oarnings is used in the firm's WACC calculation. However, If the firm will have to issue new common stock, the cost of nev common stock should be used in the firm's WACC calculation. Quantitative Problem: Barton Industries expects that its target capital structure for raising funds in the futura for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 40%. Assume that the firm's cost of debt, rd, is 8.1%, the firm's cost of preferred stock, ros, is 7.6% and the firm's cost of equity is 12.1% for old equity, Tw and 12.56% for new equity, re. What is the firm's weighted average cost of capital (WACCi) if it uses retained earnings os its source of common equity? Do not round intermediate calculations. Round your answer to three decimal places. What is the firm's weighted average cit of capital (WACC) ) it it has to issue naw common stock? Do not round intermediate calculetions, Round your answer to three decimal places