The following information relates to the RO Ltd

• RO has 100,000 bonds outstanding with a face value of $100 each, which have 5 years to maturity and which pay an-annual 6% coupon. The yield on the bonds is 7%p.a. RO's corporate tax rate is 30%.
• RO has 5 million preference shares on issue, which are currently trading for $2.75 each, giving a total market value of $13.75 million. They pay an annual dividend of 25 cents.
• RO has 7 million ordinary shares on issue, which are currently trading for $6.00 each, giving a total market value of $42 million. These shares are expected to pay an annual dividend of $0.75 next year, and this dividend is expected to grow at a constant rate of 2% in perpetuity.

1. What is the market value of RO's bonds?
2. What is RO's cost of preference shares?
3. What is RO's cost of ordinary shares?
4. What is RO's WACC?