Imagine you are the Treasurer for a company that uses $4$ sources of capital.

a$.$ Assuming the data below, what is your weighted average cost of capital?

b$.$ What could you do to lower your weight average cost of capital, and what impact would those actions have on your WACC?

Loans $-$ $$200$ million, cost of $8\%$

Equity $-$ $$600$ million, cost of $12\%$

Bonds $-$ $$400$ million, cost of $5\%$

Retained Earnings $-300$ million, cost of $4\%$