Use the following information to work problems 18 - 22:

Tax rate is 21 percent

Debt: 16,000 6% coupon bonds outstanding, $1,000 par value, 25 year to maturity, selling for $1,080. The bond make semi-annual payments.

Common Stock: 535,000 shares outstanding selling for $81 per share with a beta of 1.20

Preferred Stock: 20,000 shares of 4.2% preferred stock outstanding currently selling for $92 per share. Par value is $100.

Market: Market risk premium is 7%. The risk-free rate of 3.1%

1. Compute the market weights in the debt, preferred stock and common stock.

1. Compute the cost of debt.

1. Compute the cost of preferred stock.

1. Compute the cost of equity.

1. Compute the weighted average cost of capital (WACC).

Please show calculations and formulas