A firm has determined its optimal capital structure which is composed of the following sources and target market value proportions. Please show the formula and work.

Source of Capital	Target market Proportions
Long-term debt	40%
Preferred Stock	10 %
Common stock equity	50 %

- Debt: The firm can sell a 10-year, $1,000 par value, 9 percent bond for $980 . A flotation cost of

2 percent of the per value would be required in addition to the discount of 20 USD

- Preferred Stock: The firm has determined it can issue preferred stock at $55 per share par value. The stock will pay a $5 annual dividend. The cost of issuing and selling the stock is $1,5 per share.

- Common Stock: A firm's common stock is currently selling for $30 per share. The dividend expected to be paid at the end of the coming year is $6. Its dividend payments have been growing at a constant rate of 3 % for the last five years . It is expected that to sell, a new common stock issue must be underpriced at 2 USD per share and the firm must pay 1 USD per share in flotation costs.

Additionally the firm's marginal tax rate is 20 %.

Calculate the firm's weighted average cost of capital assuming the firm has exhausted all retained earnings