Question 5 (11 marks) The Wayco Industrial Supply has 9 million shares of common stock outstanding, 250,000 shares of preferred stock outstanding and 105,000 bonds outstanding. The preferred stock pays annual dividends of S6. The bond has par value of $1,000 and is selling for 93 percent of par. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds with similar characteristics are yielding 8.33%. The market risk premium is 8.5 percent, bills are yielding 5 percent, and Wayco's tax rate is 35 percent. The company is considering a project that is equally as risky as the overall firm. This project has initial costs of $430,000 and annual cash inflows of S87,000, $279,000, and $116,000 over the next three years, respectively. No salvage value of the project a. b. c. d. What is the capital structure weights for each of three financing methods? (4 marks) What is the firm's cost of equity? (1 marks) What is the firm weighted average cost of capital? (3 marks) Should the firm take the new project using the NPV criterion? Explain