WACC PROBLEM (36pts) Pomegranate Computer Corporation has 350,000 shares of common stock, currently trading at $32/share. The common stock of pay a dividend next year of $4.25/share, and it has a Beta calculated at 1.65. It also has 35,000 shares of preferred stock, trading at $97/share. The preferred stock pays divioe Finally, Pomegranate Computer Corporation has 9500 bonds coupon rate is 8.5% (paid semiannually), and the bonds will mature in 18 years. Pomegranate Computer Corporation is expected to of 10.5%. currently trading at $965/bond. The Pomegranate Computer Corporation expects its dividends to grow at a rate of 7%/year, and it is market rate of in a 35% tax bracket. It estimates that the risk free rate of return is 5% and the return is 12%. Calculate the WACC for Pomegranate Com NOTE: When calculating the cost of equity, compute the cost using the CAPM DCF (Dividend Constant Growth Method) and average the two puter Corporation. Be sure to show all your work. method and the Valve 3So, ooo shorg