The firm's marginal tax rate is 40%. The current price of Coleman's 15-year, 12% coupon (semiannual interest payments) bonds is $1,153.72. Coleman does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation costs. The current price of the firm's 9%, $100 par value preferred stock is $105. Coleman would incur flotation costs of 4.8% to issue new preferred stock. Coleman's common stock is currently selling at $50 per share. Its last dividend (D0) was $4.19, and dividends are expected to grow at a constant rate of 5% in the foreseeable future. Coleman's beta is 1.2, the yield on Treasury bonds is 7%, and the market risk premium is estimated to be 6%. For the bond-yield-plus-risk-premium approach, the firm uses a 4% point risk premium. Up to $300,000 of new common stock can be sold at a flotation cost of 15%. Above $300,000, the flotation cost would rise to 25%. Coleman's target capital structure is 30% debt, 10% preferred stock, and 60% common equity. The firm is forecasting it will retain earnings equal to $300,000 in the coming year.

What is the WACC after retained earnings have been exhausted and Coleman issued up to $300,000 of new common stock with a 15% flotation cost? show work and explain why