Given the information below: Please calculate the cost of capital of You Corp. (Assume no flotation cost)

Firm calculating cost of capital for major expansion program.

Tax rate = 40%.

15-year, 12% coupon, semiannual payment noncallable bonds sell for $1,153.72. New bonds will be privately placed with no flotation cost. (debt)

10%, $100 par value, annual dividend, perpetual preferred stock sells for $111.10. (preferred stock)

Common stock sells for $50. D₀ = $4.19 and g = 5%. (common stock)

Target capital structure: 30% debt, 10% preferred, 60% common equity.