What is the weighted average cost of capital for Louise Belcher Forecasting Services? The firm is in the 30% tax bracket

What is the weighted average cost of capital for Louise Belcher Forecasting Services? The firm is in the 30% tax bracket. The optimal capital structure is listed below:

Source of CapitalWeight

Long-Term Debt30%

Preferred Stock10%

Common Stock60%

Debt:The firm can issue $1,000 par value, 10% coupon interest bonds with a 20-year maturity date. The bond pays coupons payments semi-annually. The bond is currently selling at $1,100 with a flotation cost at $5 per bond.

Preferred Stock:The firm can sell preferred stock with a dividend that is 6.75% of the par value of $100. The stock is selling at $111. The cost of issuing and selling the stock is expected to be $6 per share

.Common Stock:The firm's common stock is currently selling for $104 per share. The firm expects to pay cash dividends of $6 per share next year. The dividends have been growing at 7%. The new stock must be discounted by $3, and flotation costs are expected to amount to $8 per share.

Retained Earnings:The firm expects to issue new stocks in the coming year in place of any retained earnings being used.