The Accidental Petroleum Company is trying to determine its weighted average cost of capital for use in making a number of investment decisions. The firm's bonds were issued 6 years ago and have 12 years left until maturity. They carried a 9% coupon rate, and are currently selling for $974.50.

The firm's preferred stock carries a $5.20 dividend and is currently selling at $43.25 per share. Accidental's investment banker has stated that issue costs for new preferred will be 50 cents per share.

The firm will also need to sell new common stock to finance the projects it us now considering. Accidental Petroleum common stock is expected to pay a $1.85 per share dividend next year, and is expected to maintain an 8% growth rate for the foreseeable future. The stock is currently priced at $45 per share, but new common stock will have flotation costs of 60 cents per share.

Calculate the costs of the various components of Accidental's Petroleum's capital. The firm's tax rate is 36%.

Given the information about Accidental Petroleum in the previous problem, calculate the company's weighted average cost of capital assuming that its new financing will consist of 40 percent debt, 40% new common stock and 20 percent preferred stock.