ABC Industries currently has $5,000,000$ common shares outstanding, trading at $$15\mathrm{.}00$ per share. The estimated market return is $12\%.$ ABC also has debt outstanding that has a current market value of $$30,000,000.$ If ABC faces a tax rate of $35\%,$ what is the weighted average cost of capital for the firm? The current yield on ABC bonds is $7\%.$ Show all calculations in determining the WACC.

b: The treasurer for a firm that is about to issue common shares believes that the shares can be marketed at $$12\mathrm{.}00.$ The banking group responsible for marketing the shares is of the opinion that the market value of the shares is closer to $$11\mathrm{.}00$ per share. What will be the likely the undertaking of the banking group for this issue and why?

c: How might this situation change if the banking group agreed that the fair market price for the shares was $$12\mathrm{.}00?$