You are a treasury analyst at MacClellan Holdings, Inc., a private equity firm. John Knight, the president of XYZ Company, one of the MacClellan's portfolio companies, is unfamiliar with the concept of the weighted average cost of capital (WACC). John's background is in operations and marketing. Your manager has asked you to outline for John a basic description of WACC and to share your calculation of the WACC for XYZ Company. The following information is available for your calculation: Debt: Market value of $100,000,000 with an after-tax market cost of 10% Preferred Stock: Market value of $20,000,000 with an after-tax market cost of 7% Common Stock: Market value of $90,000,000 with an after-tax market cost of 16% . ASSIGNMENT: Write an email to John Knight (johnknight@xyz.com) which email: Starts with a statement of purpose of the email Defines the weighted average cost of capital (WACC) Explains how WACC is used Presents the WACC for XYZ Company (show your actual calculations on a separate attachment). You can refer John to the separate sheet to show how you calculated the WACC. You do not have to do a detailed explanation of the parts of the calculation, but, on your calculation sheet, please footnote the need to use market values and market costs, and to convert the cost of debt to an after-tax basis. Asks John to contact you with any questions or for a more detailed explanation Note: Your email is Yourname@macclellan.com