Very Busy Airlines has the following capital structure:

Debt $$30,000,000$

Preferred Stock $$30,000,000$

Common Stock $$40,000,000$

Additional info:

Bond interest $($coupon$)5\%$

Yield to maturity $($bonds$)8\%$

Price of preferred stock $$70$

Price of common stock $$22$

Preferred dividend $$7$

Common dividend $($next$)$ $$1$

Flotation cost, new common stock $$2$

Growth rate of dividends $8\%$

The firm$$s tax rate is $30\%.$ Compute the firm$$s weighted average cost of capital $[$WACC$].(10)$

$[$Hint: First compute weights for debt, preferred stock, and common stock in the capital structure. Then compute their respective component costs. Finally compute the WACC$].$

Please show all work.