You are the CFO of a company, and you need to analyze a new product line. The company has 6% coupon-bonds outstanding with $1000 face value that trade at par. Their stock, which trades at $130 on the NASDAQ has a beta of 1.55, plans to pay a dividend of $4 in one year, and the dividends are expected to grow at 6% annually, indefinitely. The company has a debt-to-equity ratio of 4 and pays taxes at the 35% annual tax rate. If the expected return on the market is 10% and treasury bills pay 2%, what is the weighted average cost of capital for this company? (assume no preferred stock) - Please use at least 4 decimals throughout your calculations. - HINT: Use the debt-to-equity-ratio to find the weights; wd = DEBT/(Total Assets) and ws = EQUITY/(Total Assets). Use the technique (formula) we used back in Chapter 3. Enter WEIGHTS (w's) as decimals with 4 places, 0.1025 for 10.25%; Enter COSTS (r's) and WACC as percents with 2 decimals, e.g. 10.25 for 10.25%

wd =	(e.g., 0.1025)
rd =	% (e.g., 10.25)
wp =	(e.g., 0.1025)
ws =	(e.g., 0.1025)
rs =	% (e.g., 10.25)
WACC =	% (e.g., 10.25)