Instructor's note: Answer the following question using MS-Excel. Make sure you use list all variables necessary and show all work.

ABC Corporation finances its projects with 40 percent debt, 10 percent preferred stock, and 50 percent common stock.

The company just issued 9.0% coupon bonds at a yield to maturity of 8.75 percent. The cost of its preferred stock is 12 percent. The company's common stock currently sells for $30 a share. The company's dividend is currently $3.00 a share, and is expected to grow at a constant rate of 6 percent per year. Assume that the flotation cost on debt and preferred stock is zero and that all equity requirements will be generated via related earnings. The company's tax rate is 40 percent.

What is the company's weighted average cost of capital (WACC)?