Part 1 1 Peter Johnson, the CFO of Homer Industries, Inc is trying to determine the weighted Cost of Capital (WACC) based on two different capital structures under consideration to fund a new project. Assume the company's tax rate is 30%. Tax Rate 30% Component Debt Preferred Stock Common Stock Total Scenario 1 $4,000,000.00 1,200,000.00 1,000,000.00 $6,200,000.00 Scenario 2 $1,000,000.00 1,500,000.00 3,700,000.00 $6,200,000.00 Cost of Capital 8% 10% 13% 1-a. Complete the table below to determine the WACC for each of the two capital structure scenarios. (Enter your answer as a whole percentage rounded to 2 decimal places (e.g..3555 should be entered as 35.55).) Scenario 2 Weight % Cost of Capital Scenario 1 Weight % 64.52% Tax Rate Scenario 1 Scenario 2 Weighted Cost Weighted Cost 16.13% Debt 8% 30% Preferred Stock 19.35% 24. 19% 10% Common Stock 16.13% 59.68% 13% Total 100.00% 0.00% 1-a. Complete the table below to determine the WACC for each of the two capital structure scehallos. (Enter percentage rounded to 2 decimal places (e.g..3555 should be entered as 35.55).) Cost of Capital Tax Rate Scenario 1 Weight % 64.52% Scenario 2 Weight % Scenario 1 Scenario 2 Weighted Cost Weighted Cost 16.13% Debt 30% 8% Preferred Stock 19.35% 24.19% 10% Common Stock 16.13% 59.68% 13% Total 100.00% 0.00% 1-b. Which capital structure shall Mr. Johnson choose to fund the new project? Scenario 1 Scenario 2