Problem $13-7$ WACC $($LO$1)$

Examine the following book$-$value balance sheet for University Products Incorporated. The preferred stock currently sells for $$15$ per share and pays a dividend of $$3$ a share. The common stock sells for $$20$ per share and has a beta of $0\mathrm{.}8.$ There are $2$ million common shares outstanding. The market risk premium is $8\%,$ the risk$-$free rate is $4\%,$ and the firm's tax rate is $21\%.$

$\backslash$table$[[,,\backslash$table$[[$OOK$-$VALUE BALANCE SHEET$],[($Figures in $ millions$)]],],[$Assets$,,$Liabilities and Net Worth,$],[$Cash and short$-$term securities$,$$$3\mathrm{.}0,\backslash$table$[[$Bonds$,$ coupon $=5\%,$ paid annually $($maturity $=10$