Question $8(5$ points$)$

XYZ corp. has $20,000$ shares of common stocks outstanding that are currently traded

for $$13$ per share and have a rate of return of $5\mathrm{.}20\%.$ They also have $4,000$ shares of

$6\mathrm{.}95\%$ preferred stocks that are selling for $$69\mathrm{.}5$ per share. The preferred stock has a

par value of $$100.$ Finally, they have $7,000$ bonds outstanding that mature in $11$

years, have par value $($face value$)$ of $$1,000,$ and sell for $97\mathrm{.}5\%$ of par. The yield$-$to$-$

maturity on the debt is $3\mathrm{.}40\%.$

What is the XYZ$\text{'}$s weighted average cost of capital if the tax rate is $21\%?$

$($Use two decimal places when solving this problem$)$

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