NO.4 (12 Marks) In 2020, Square has determined its optimal capital structure, which is composed of the following sources and target market value proportions: Source of capital Target market Proportions Long-term Debt 35% Preferred Stock 25% Common Stock 40% Long Term Debt: The firm can sell a 10-year, $1,000 par value, 9 percent bond for $970. A flotation cost of 3 percent of the face value would be required. Preferred Stock: The firm has determined it can issue preferred stock at $35 per share par. The stock will pay a $3 annual dividend. The cost of issuing and selling the stock is $4 per share. Common Stock: The firm's common tock has a beta of 1.8. The risk-free rate is 5%, and the market return is 16%. Additionally, the firm's marginal tax rate is 35 percent. a) Find the component costs of debt, preferred stock, and common stock. b) What is the WACC