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NEED HELP PLEASE Gold Diggers, Inc. has 652,000 shares of common stock, currently trading at $90.52/share. The common stock of Gold Diggers, Inc. is expected

NEED HELP PLEASE

Gold Diggers, Inc. has 652,000 shares of common stock, currently trading at $90.52/share. The common stock of Gold Diggers, Inc. is expected to generate a dividend of $3.00/share next year, and it has a Beta calculated at 1.95. It also has 10,000 shares of preferred stock, trading at $120/share. The preferred stock pays dividends of 11%. Finally, Gold Diggers, Inc. has 57,000 bonds currently trading at $1020/bond. The coupon rate is 6%, and the bonds will mature in 8 years. Gold Diggers, Inc. expects its dividends to grow at a rate of 12% per year, and it is in a 21% tax bracket. It estimates that the risk-free rate of return is 5.5% and the market rate of return is 12%.

Calculate the WACC for Gold Diggers, Inc. Be sure to show all your work. NOTE: When calculating the cost of equity, compute the cost using the CAPM method and the DCF (Dividend Constant Growth Method) and average the two.

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