PLEASE WRITE ANSWER IN YOUR OWN WORDS BECAUSE THIS ANSWER WILL BE SUBMITTED ON THE TURNTIN. XYZs capital structure is made of 50% Ordinary Equity, 30% Preferred Stock and 20% Debt. XYZs dividend payout ratio is 40 percent, and the current expected net income is $650,000. XYZs marginal tax rate is 30% and investors expect the dividends and earning to grow at the rate of 6 percent per year in perpetuity. XYZ just paid a dividend of $5 per share on its 750,000 issued ordinary shares and is currently trading at $40 per share. XYZ has issued 300,000 new preference shares with the market price of $60 per share. XYZ is committed to pay a dividend of $9 per share. XYZ has issued 12,000 bonds with face value of $1000 and 15 years to maturity, currently traded at their face value. XYZ offers an annual coupon amount of $100 for each bond. Determine the market value of ordinary equity, preference shares and debt. Determine the cost of each capital structure component of XYZ. Calculate the weighted average cost of capital of XYZ. Which projects should XYZ accept given the following investment opportunities.?

Project Initial Investment Rate of return

Dill $500,000 16.5%

Pit $450,000 14.5%

Sam $300,000 17.5%