Titan Mining Corporation has 8.5 million shares of common stock outstanding, 250,000 shares of 5 percent preferred stock outstanding, and 135,000 7.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 114 percent of par. The market risk premium is 7.5 percent, T-bills are yielding 4 percent, and Titan Mining's tax rate is 35 percent.

Debt

Bonds outstanding

135,000

Settlement date

01/01/00

Maturity date

01/01/15

Annual coupon rate

7.50%

Coupons per year

2

Bond price (% of par)

114

Par value ($)

$ 1000

Common stock

Shares outstanding

8,500,000

Beta

1.25

Share price

$ 34

Preferred stock outstanding

Shares outstanding

250,000

Coupon rate

5.00%

Share price

$ 91

Par value

$ 100

Market

Market risk premium

7.50%

Risk-free rate

4.00%

Tax rate

35%

What is the firm's weighted average cost of capital, or WACC?

Pretax cost of debt_____________

Aftertax cost of debt_____________

Cost of equity_____________

Cost of preferred_____________

WACC_____________