What is Pure Michigan's Cost of Capital (WACC)? (2.5 Points)

Their marginal tax rate = 30.0%

par value of the debt (fv)	$1,000
Coupon rate	5.00%
Semi annual couon payment (pmt)(fv*coupon rate/2)	$25.00
Flotation expenses (f) is	2%
The sale price of the bond is	$792.99
Net Amount received for baond (pv)(Sale price *(1-F)	$777.13
Number of coupons remaining till maturity (nper)(15*2)	30
Semi annual yield formula is RATE(nper,-pmt,pv,-fv)
semi annual yield is	3.75%
Annualized yield = Semi annual yield *2
The Annualized before tax cost of debt is	7.50%

Cost of preferred stock = Annual dividend/ net proceeds

Cost of preferred stock = $4.00/$98.98

Cost of preferred stock = 0.040412204

Cost of preferred stock = 4.0412%

Cost of equity = 15.9486%