Q7: Company A has 500,000 shares outstanding and the share price is $10, $10,000 bonds outstanding and the bonds are trading at 110, 10,000 preferred shares outstanding and they currently sell for $103 a share and have a par value of $100? A) Calculate the weight of debt, equity and preferred in the capital structure? B) If the pre-tax cost of debt is 5%, cost of preferred is 6% and cost of equity is 8% what is the Weighted Average Cost of Capital or WACC? Tax rate is 20%. 8 Marks A) Weight of Debt Weight of Preferred Shares Weight of Equity B) WACC=