what is the WACC?

During the last few years, XYZ Corporation has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital Fosts have been declining, and the company has decided to look seriously at a major expansion program proposed by the marketing department. Assume that you are an assistant to Sarah Smith, the financial vice president. Your first task is to estimate XYZ's cost of capital. Smith has provided you with the following data, which she believes may be relevant to your task: The firm's tax rate is 30%. - The current price of XYZ Corporation's 11% coupon, semiannual payment, and noncallable bonds with 20 years remaining to maturity is $1,250.80. There are 80,000 bonds. XYZ Corporation does not use short-term interest-bearing debt on a permanent basis. New bonds would be privately placed with no flotation cost. - The current price of the firm's 9%,$100 par value, quarterly dividend, perpetaal peeferred stock is $105,75. There are 150,000 outsianding shares. XYZ Corporation would incur flotation eosts equal to 4% of the proceeds on a new issuc. - XYZ Corporation's common stoek is currently selling at $40 per share. There are 4 million outstanding common shares. Its last dividend (D0) was $2.50, and dividends are expocted to grow at a coestant rate of 4.5% in the foresceablo future. XYZ Corporation's beta is 1.1 , the yicld on T-bends is 5.2%, and the market risk premium is estimated to be 5.8%. For the own-bond-yield-plus-judgmental-risk-premium approach, the firm uses a 3.0% rak premium. To help you structure the task, Sarals Smith bas asked you to answer the following questions: ld speaker notes WACC=rd(1T)wa+rcd(1T)wsad+rmwpm+rsws