The companys tax rate is 30%.

Common Stock: 20 million shares outstanding, selling for $4 per share; the beta is 1.05.

Preferred Stock: 5 million shares outstanding, selling for $5 per share, pays $1 annually per share.

Debt: 1 million 6% quarterly coupon bonds outstanding, $100 face value, 20 years to maturity, selling at par.

Market: 7.5% market return and 4.5% risk-free rate.

a)Compute the cost of each security

b) Compute weight of each security

c) Compute WACC

Do not use Excel!