The market values and after$-$tax costs of various sources of capital used by Ridge Tool are shown in the following table.

Source of capital Market value Individual cost

Long$-$term debt $$700,0005\mathrm{.}3\%$

Preferred stock $50,00012\mathrm{.}0$

Common stock equity $650,00016\mathrm{.}0$

a$.$ Calculate the firm$$s WACC.

b$.$ Explain how the firm can use this cost in the investment decision$-$making process.

Please show your work.