#5 p2

Kuhn co, is considering a new project that wall require an initial investment of $20 milion. It has a target capital structure of 45% debe, 4% preferred steck, and 51% common equity. Kahn has noncailable bonds outstanding that moture in five years with of face value of $1,000, an annual coupan rote or 10%, and a market price of $1,050.76. The yield on the company's current bonds is a good approximation of the yield on any new bends that it istues. The company can sell shares of prefefred stock that pay an annual dividend of $9 at a price of 592.25 per share. Kuhn does not have any retained eamings avaluble to finance this project, so the firm will have to issue new cormmon stock to help fund it. Its common stock is currently seling for $33.35 per share, and it is expected to pay a dividend of $1.36 at the end of next year, Flotation costs will represent 84, of the funds raised by tosuing new common stock. The company is projected to grow at a constant rate of 9.2%, and they face a tax. bete of 25%. What will be the WACC for this project? (Note: Round your intermediate calculations to two decimal places.)