Weighed Average Cost of Capital Case Dear students, Your assignment for chapter 11 is as follows. Your company is financed with 30% debt (bonds), 30% preferred stocks, and 40% common stocks. Tax rate is T=40%. Your role is to find the weighted average cost of capital for this company. 1) The bonds have $1,000 Par value, 5% coupon rate, and 7 years to maturity. Interest is paid annually. Find YTM for if bonds' prices is $875. Show calculations in details. Show formula and substations. 2) The preferred stock pays a fixed dividend of $5 per share per year. What is the current required return of the preferred stock if its price is $42. Show calculations in details. Show formula and substations. 3) The common stock has just paid a dividend of Do = $5. If current price is $40 and growth rate is g= 2%, what is the required return on the stock? 4) What is the weighted average cost of capital of this company? 5) The company is currently considering the following projects: Project IRR 8% 10% 12% 14% Which projects are good for this company? 3 6) If the company changes capital structure to 50% debt (bonds), 30% preferred stocks, and 20% common stocks. Which projects are good for this company? Good luck; Dr. Alhenawi