To calculate its weighted average cost of capital, to use in evaluating a new company investment. The firm is considering a new investment in a warehousing facility, which it believes will generate an internal rate of return of 11.5%. The market value is as follows:

Source of Capital Market Value

Bonds 10,000,000

Preferred Stock 2,000,000

Common Stock 8,000,000

To finance the investment, issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950. Preferred stock paying a $2.50 annual dividend was sold for $25 per share. Common stock is currently selling for $50 per share and has a Beta of 1.2. The firm's tax rate is 34%. The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%.

What discount rate (WACC) should use to evaluate the warehousing facility project.

Where do I start...help with explanation