The bond of Company ABC has 3 years to maturity. The bonds coupon rate is 10% and it is selling at $1,136.16. The total value of the bonds is $10M. The company also has preferred stocks, which are worth $10M. The preferred stock pays a dividend of $2 a share and currently sells at $20 a share. The common stocks of the company are worth $20M. The beta of the common stock is .8, the market return is 10%, the risk free rate is 6%, and the firms tax rate is 40%.

What is Company ABCs WACC?

What is the cost of preferred stock (R_P) for ABC?