Answer:
WACC = 11.13%
Explanation:
total market value common stocks = 31,500 x $78 = $2,457,000
total market value of preferred stock = 7,250 x $94.50 = $685,125
total market value of debt = $401,000 x 1.105 = $443,105
total = $3,575,230
Rcs = 13.05%
Rps = $7.70 / $94.50 = 8.15%
Rd = 8.05%
WACC = ($2,457,000/$3,575,230 x 13.05%) + ($685,125/$3,575,230 x 8.15%) + ($443,105/$3,575,230 x 8.05% x 60%) = 8.968% + 1.562% + 0.6% = 11.13%
