Nova Corp. is evaluating next year$$s capital project with a total capital cost of $$500,000.$ The project will not alter the average risk of the firm. The company currently has $300,000$ common shares outstanding at $$8$ each. The last dividend paid was $$0\mathrm{.}80$ and it is expected to grow at $3\%$ indefinitely. Besides the common shares, the company also has $5000$ preferred shares that pay $$3$ dividend at a current market price of $$60.$ In addition to equity, the company issued $10-$year coupon bonds $3$ years ago. The coupon rate is $6\%$ and paid semi$-$annually. The bonds are traded at an OTC market with a quoted price of $105,$ and there are $1000$ of them.

The company wants to keep a target capital structure for the new project the same as the company itself. What value of WACC the project should have if the company has a tax rate of $40\%?$

Now consider floatation costs of issuing new securities to finance the capital project. Underwriters will charge $3\%$ and $2\%$ to issue common shares and preferred shares, respectively. Bond dealers will charge $$25$ per bond as issuing costs. If the project has a life span of $10$ years with annual cash flow from assets of $$80,000,$ should the company go ahead with the project?