Smart Point company hired you as a consultant to estimate the companys WACC . You have to Calculate:

Cost of debt,

Cost of Preferred stock

Cost of Equity using the three methods (Bond yield risk premium, CAPM and DCF) it doesnt expect to issue new common stock.

Estimate WACC using the lowest of the three methods to calculate Cost of Equity. The information you know is : The companys target capital structure: 25% Debt, 15% Preferred stock and 60% Common Equity. The company has 500,000 bonds outstanding, 20M shares outstanding that sell at a $34 per share and 2M preferred stocks that sell at $98per share. Companys tax rate 30%. 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.

The Firms noncallable bonds mature in 20years, have a 8.75% annual coupon, and a market price $965. The Bonds pays coupon quarterly. The firm preferred stocks pays a 7% dividend. The firm just paid a dividend of $2.60 per share and the constant growth rate is expected to be 6.5%