Greenleaf Company is a renewable energy company based in Vancouver, Canada. Greenleaf is a pioneer In this field with a strong brand and reputation for excellence and Innovation. The recent interest in renewable energy has created growth opportunities for Greenleaf. The Special Projects department is considering a development opportunity for new fuel cell technology This opportunity is a large project that will consume a significant amount of resources, including financial resources. The Director of Finance has asked you to calculate the weighted average cost of capital that should be used to evaluate the new opportunity. The company's tax rate is 40%. Calculate WACC using the DDM approach for calculating the cost of equity. Additional information: Greenleaf is publically traded on the national exchange. The company currently has 1,250,000 common shares outstanding, currently trading at $20. Historically, Greenleaf has paid 40% of its earnings to shareholders in the form of dividends and they expect this to continue in the future. Last year, Greenleaf reported $2.50 EPS which translated to a 9% ROE. Greenleaf also has $15,000,000 in preferred shares outstanding with a 5% dividend rate. The net after-tax flotation costs related to the preferred shares was 2% and preferred shares with similar risk preferred shares are currently yielding 4.8%. Last week Greenleaf issued a 10-year bond with 6% annual coupons. The initial bond offering raised $20 million, gross of 2.5% after-tax issuance costs; these bonds initially sold at par. Adverse market conditions reduced the bond yield drastically this week, so the current market rate for similar bonds is 5.75%