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You decide to finance a new innovation with issuance of 5 million shares of 11 years, 5% coupon bond with yield to maturity 7%, 10 million shares of preferred stock with dividend $4 and return of 10% and 800 million shares of common equity at current price of $30 per share.

You decide to finance a new innovation with issuance of 5 million shares of 11 years, 5% coupon bond with yield to maturity 7%, 10 million shares of preferred stock with dividend $4 and return of 10% and 800 million shares of common equity at current price of $30 per share. If its common stock has a beta of 1.25 an long term risk free rate is 3% and market risk premium is 7%. What is the weighted average cost of capital, with 45% tax? No worry about flotation cost. (show work in excel)
 
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