Solar Flare Fireworks wants to determine Weighted Average Cost of Capital The company has issued $5,000 par bonds selling for $5,550 with a coupon rate of 4% paid semiannually with 10 years to maturity The company issued 8% coupon rate preferred stock with a par value of 1,000 and a flotation cost of $30 which sells for $900 The company has a 20% tax rate and the following information is available for common stock CAPM Data: Beta is .9 risk free rate is 1% and the expected market return is 11% The company has $25 million of debt, $10 million of preferred stock and $15 million of existing stock. a. ( 7 points) What is the current Weighted Average Cost of Capital? b. (3 points) If the company were to issue $50 million of new stock what would be the Weighted Cost of Capital? Solar Flare Fireworks wants to determine Weighted Average Cost of Capital The company has issued $5,000 par bonds selling for $5,550 with a coupon rate of 4% paid semiannually with 10 years to maturity The company issued 8% coupon rate preferred stock with a par value of 1,000 and a flotation cost of $30 which sells for $900 The company has a 20% tax rate and the following information is available for common stock CAPM Data: Beta is .9 risk free rate is 1% and the expected market return is 11% The company has $25 million of debt, $10 million of preferred stock and $15 million of existing stock. a. ( 7 points) What is the current Weighted Average Cost of Capital? b. (3 points) If the company were to issue $50 million of new stock what would be the Weighted Cost of Capital