templeton extended care facilities , Inc. is considering the acquisition of a chain of cemeteries for $400 million. because the primary asset of this business is real estate, thempleton's managemnt had determined that they will be able to borrow the majority of the money needed to buy the business. the current owners have no debt financing but templeton plans to borrow $300 million and invest only $100 million in equity ( $40 million in preferred shared and $60 million in common shares) in the aquisition.

templeton is issuiung new common stock at market price if $27. dividends last year were $1.45 and are expected to grow at an annual rate of 6% forever.

templeton is issuing $1000 par value bond that pays 8% annual interest and matures in 15 years. investors are willing to pay $ 950 for the bond and templeton faces a tax rate of 35%

the preferred stock of templeton currently sells for $36 a share and pays $2.50 in dividend annually.

what is the weighted average cost of capital?

please show step by step working

No excel