PQR Company has a capital project of $700,000 for 2017. The Debt: equity ratio of 45.55 will be maintained. Other relevant information is as follows:-

 

Cost of debt = 10% pa

Current market share= $22

Latest dividend/ share paid was %1.50

Growth rate is assumed to be 8%

Flotation cost ( issue of new shares)= 15%

Expected before tax annual earnings = $480,000

Payout ratio= 40%

Tax rate = 20%

Required

Calculate the relevant weighted average cost of capital for PQR company (show all necessary working).