A company has the following capital structure, which it considers to be optimal: debt = 20% (Company has only long-term debt), preferred stock = 20% and common stock = 60%. Company's tax rate is 40%, and investors expect earnings and dividends to grow at a constant rate of 5% in the future. Company paid a dividend of $3.70 per share last year, and its stock currently sells at a price of $50 per share. Ten-year Treasury bonds yield 6%, the market risk premium is 5%, and it's beta is 1.3. The following terms would apply to new security offerings. Preferred: New preferred stock could be sold to the public at a price of $100 per share, with a dividend of $9. Flotation costs of $4 per share would be incurred. Debt: Debt could be sold at an interest rate of 9%. Common: New common equity will be raised only by retaining earnings. a. Find the component costs of debt, preferred stock, and common stock. b. what is the WACC? b. What is the WACC