Given this capital structure and acquisition details, estimate the Weighted Average Cost of Capital (WACC) for this upgrade project. Tax rate = 40.00%

Capital Acquisition and Allocation & Estimation of the Cost of Capital (WACC): Imagine that DelRay is going to blend different capital sources to raise the funds needed for this upgrade project. The finance team of DelRay comes up with the optimal capital structure to finance this project by blending 40.00% debt (long-term corporate bonds), 30.00% new retained earnings as internal equity (internal common equity), and 30.00% external equity (new common stock issuances). Assume that DelRay is not going to use preferred stock to find this upgrade project. The details of the capital acquisition and allocation are as follows: DelRay wants to issue 10-year corporate bond at a $1,000 price with a 15.00% coupon rate and the issuance cost of each bond is $20 for each bond. Kaht" is estimated as 6.84%. DelRay wants to reinvest its retained earnings by selling for its common stock for $56.00. This stock pays a current dividend of $0.20 per share and earnings and dividends are expected to grow at 10.00% rate into foreseeable future. DelRay's common stock is currently selling for $39.00 per share. This stock expects to pay a current dividend of $1.60 per share and earnings and dividends are expected to grow at 7.00% rate. The issuance costs on this stock are $2.00 per share. Hotel DelRay New Property Management System (PMS) Acquisition & Installation Project Capital Acquisition and Allocation & Estimation of the Cost of Capital (WACC) After-tax Cost of Debt M k R4 Cost of New Retained Earnings (Internal Common Equity) do d 8 k Cost of External Equity (New Common Stock issuances) Po Part do d g K me The Cost of Capital (WACC) k