Q6. Gold Sharks company hired you as a consultant to estimate the company's WACC. The firm's target capital structure is 30% Debt, 12% Preferred stock and 58% Common Equity. The Firms noncallable bonds mature in 15years. The bonds have a 9.5% annual coupon rate, a par value of $1,000 and a market price of $1,135. Bonds pay coupon payments semi annually. The firm has 200,000 bonds outstanding. The firm has 1M of preferred stock outstanding with a dividend per share of 7$ and it currently sells at $98 per share. Common Equity investors bond yield risk premium 6%. Risk free rate is 2.25%, market risk premium 10.5% and common stock beta is 1.15. Company's tax rate 30%. The firm has 20M shares outstanding of common stocks that sell at $21 per share. The firm just paid a dividend of $1.80 per share and the constant growth rate is expected to be 5.5% The firm would like to use the lowest of the three methods (Bond yield risk premium, CAPM and DCF) to estimate the cost of equity, and it doesn't expect to issue new common stock. a. Calculate the cost of Equity using each one of the three methods, b. Calculate the cost of debt c. Calculate the cost of preferred stock d. Calculate the WACC using the target capital structure provided