1. Last year's sales were $225,000,000.
   
    
2. The company has 60,000 bonds with a 30-year life outstanding, with 15 years until maturity. The bonds carry a 10 percent semi-annual coupon, and are currently selling for $874.78.
   
    
3. You also have 100,000 shares of $100 par, 9% dividend perpetual preferred stock outstanding. The current market price is $90.00. Any new issues of preferred stock would incur a 3.33% per share flotation cost.
   
    
4. The company has 10 million shares of common stock outstanding with a current price of $14.00 per share. The stock exhibits a constant growth rate of 10 percent. The last dividend (D₀) was $.80. New stock could be sold with flotation costs of 15 percent.
   
    
5. The risk-free rate is currently 6 percent, and the rate of return on the stock market as a whole is 14 percent. Your stock's beta is 1.22.
   
    
6. Stockholders require a risk premium of 5 percent above the return on the firms bonds.
   
    
7. The firm expects to have additional retained earnings of $10 million in the coming year, and expects depreciation expenses of $35 million.
   
    
8. Your firm does not use notes payable for long-term financing.
   
    

The firm considers its current market value capital structure to be optimal, and wishes to maintain that structure. (Hint: Examine the market value of the firm's capital structure, rather than its book value when determining the weights in the WACC calculations.)