A$-$Rod Manufacturing Company is trying to calculate its cost of capital for use in making a capital budgeting decision. Mr$.$ Jeter, the vice president of finance, has given you the following information and has asked you to compute the weighted average cost of capital.

The company currently has outstanding a bond with a $11\mathrm{.}3$ percent coupon rate and another bond with an $8\mathrm{.}9$ percent rate. The firm has been informed by its investment banker that bonds of equal risk and credit rating are now selling to yield $12\mathrm{.}2$ percent. The common stock has a price of $$67$ and an expected dividend $($D$1)$

of $$1\mathrm{.}87$ per share. The historical growth pattern $($g$)$

for dividends is as follows:

$$1\mathrm{.}42$

$1\mathrm{.}56$

$1\mathrm{.}71$

$1\mathrm{.}87$

The preferred stock is selling at $$87$ per share and pays a dividend of $$8\mathrm{.}30$ per share. The corporate tax rate is $30$ percent. The flotation cost is $3\mathrm{.}0$ percent of the selling price for preferred stock. The optimum capital structure for the firm is $30$ percent debt, $10$ percent preferred stock, and $60$ percent common equity in the form of retained earnings.

Compute the average historical growth rate.

Note: Do not round intermediate calculations. Round your answer to the nearest whole percent and use this value as g$.$ Input your answer as a whole percent.

Compute the cost of capital for the individual components in the capital structure.

Note: Use the rounded whole percent computed in part a for g$.$ Do not round any other intermediate calculations. Input your answers as a percent rounded to $2$ decimal places.

Calculate the weighted cost of each source of capital and the weighted average cost of capital.

Note: Do not round intermediate calculations. Input your answers as a percent rounded to $2$ decimal places.