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How to calculate the weighted average cost of capital (WACC) of this example ? Please explain it in details. Thanks! ABC Limited has asked for

How to calculate the weighted average cost of capital (WACC) of this example? Please explain it in details. Thanks!

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ABC Limited has asked for your advice on the issues of financing and investment. ABC Ltd. invests in the development sector's shareholdings of companies. The following are highlights from ABC Ltd's latest balance sheet: ABC Ltd. Statement of Financial Position as at 31 December 2016 NET ASSETS $2,220,000 FINANCED BY: 800,000 Issued Ordinary Shares @ $1 each $800,000 Retained Reserves $400,000 12% Preference Shares @ $1 each $600,000 20% Debentures (still have 17 years to maturity) $420,000 $2,220,000 Notes: Common stock is presently trading at $4 and the dividend policy is to maintain the growth of 20% per year. Preferred stock is trading at $3.2. ABC Ltd. recently proposed a dividend of $0.60 par common stock relating to the year ended 31 December 2016. No preferred or common stock dividends relating to the year ended 31 December 2016 have been paid as yet. Debentures' interest are paid semi-annually. Debentures are currently trading at 91% of par value. A corporation tax of 32% is payable on profits in the year in which profits are reported. How to calculate ABC Ltd's weighted average cost of capital (WACC)

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