finance

4. The balance sheet for Stratton Co. shows $400.000 in common equity, $100,000 in preferred stock, and $500,000 in long-term debt. The company has 50,000 common shares outstanding at a market price of $55 per share. The firm's 20,000 shares of preferred stock are currently priced at $45 per share. The firm has 500 bonds outstanding selling at $500. The par value of the bond is $1000. The company's before-tax cost of debt is 3%. The cost of preferred stock are estimated to be 4%. We expect the market portfolio to earn 6%, and T-bill yields are 2%. The firm has a beta of 1.2. What's the required return on equity for this firm? If the firm's marginal tax rate is 40%, what is the firm?s weighted average cost of capital (WACC)