Due to the need for expanded production, Wilson and Wilson Company decides to build a new factory. The

company decides to fund the investment from the sources listed below.

The loan has a before$-$tax effective annual rate of $10\mathrm{.}25$ percent. The bonds have an after$-$tax effective annual rate of

$7$ percent. The stock price is stable and is currently trading at $$200/$share with a $$14$ annual dividend. Wilson and

Wilson is in a $35$ percent tax bracket and pays taxes annually. Determine the weighted average cost of capital.