Weighted-Average Cost of Capital: The finance staff of Rodrigo Driving Supplies (RDS) received a request to analyze a potential investment in new factory equipment that will expand operations. Before beginning the analysis of the project, the staff is meeting to estimate the firms weighted-average cost of capital (WACC). They made a series of assumptions and developed information needed to compute the RDSs WACC: The firm will use the following fair values to develop the weighting factor for its WACC: Estimated Fair Value Long-term Debt $95,000,000 6.5% Preferred Stock, $100 par $7,500,000 Common Equity $147,500,000 The firm will estimate its pre-tax cost of debt capital based on its outstanding bond issue. RDS has 8% bonds outstanding that are currently priced at 96.0 on the bond market. The bonds pay interest semi-annually and are 15 years from maturity. The preferred stock is currently selling at a price of $93.75 per share. RDS will use CAPM to estimate its cost of common equity using these values: Beta for RDS 1.20 Short-term Treasury Yields 3.8% Expected Return on the S&P 500 12.8% RDS estimates its tax rate to be 25% throughout its analyses. Weighted-Average Cost of Capital: 4) Go to the WACC worksheet. Prepare the supporting schedules provided to compute the cost of the components of the capital structure of Rodrigo Driving Supplies. Enter the relevant fair values in the components of the capital structure of Rodrigo Driving Supplies. Compute the weighting factors for each component. Enter the values from the supporting schedules in the spaces provided. Compute the initial investment in the project. Compute the weighted-average cost of capital for Rodrigo Driving Supplies. Use the =ROUND function to round the rate to 3 decimals (such as 10.5%)