WRE Energy Limited is a major oil and gas exploration company in Western Australia. It currently has $300 million of market value debt outstanding, consisting of 9% coupon bonds with a maturity of 15 years. The bonds pay semi-annual coupons. The face value of each bond is $1,000 and are currently priced at $1,024.87 each. The company also has an issue of 2 million preference shares outstanding with a market price of $20 each, paying an annual dividend of $1.20. WRE Energy also has 14 million ordinary shares outstanding with a price of $25.00 per share. The company is expected to pay a $2.20 ordinary dividend 1 year from today, and that dividend is expected to increase by 7% per year forever. The relevant corporate tax rate is 30%.

a. Outline the necessary steps required to estimate the companys weighted average cost of capital.

b. Calculate the after-tax cost of each of the companys current financing sources .

c. Using the information provided, calculate the market values for the financing sources for WRE Energy .

d. Using the information from b.) and c.) calculate the companys after-tax weighted average cost of capital .

(SHOW WORKINGS PLEASE)