Nipigon Manufacturing has a cost of debt of 7 %, a cost of equity of 12%, and a cost of preferred stock of 9%. Nipigon currently has 130,000 shares of common stock outstanding at a market price of $25 per share. There are 48,000 shares of preferred stock outstanding at a market price of $38 a share. The bond issue has a face value of $950,000 and a market quote of 104. The companys tax rate is 35%.

Required:

Calculate the weighted average cost of capital for Nipigon. You must show and clearly label all calculations to receive full marks. You can either enter your calculations in the space provided below or you can upload them to the drop box provided in the Assignments area.