The FGM Corporation has 800M shares of its common stock outstanding, which is priced at $20 per share. The stock beta is estimated at 1.5. In addition, the Corporations 8%, $20B par, 15-year, B-rated semiannual coupon paying bonds are priced at a discount of 10% from its par. In addition, the FGM Corporation also finances its operation with 100M shares of its preferred stock, which pays annual DPS of $4 and is currently priced at $50 per share. Currently, the yield on short term Treasury securities is 2%, and the market risk premium is 9.5%. Assume that the tax rate is 21%.

(i) Compute the WACC of The FGM Corporation. < >

(ii) Say, the flotation costs for issuing new debt, preferred stock, and common stock capital are, respectively, 3%, 8%, and 15%. Without the adjustment for flotation costs, the NPV of The FGM Corporations $120M project is estimated to be $8M. Compute the weighted average flotation cost, and the NPV of this project after taking into account of the flotation costs. <8.5641%; -$3,239,484>