Financial Management 8

Based on the information below, calculate the weighted average cost of capital.  Great Corporation has the following capital situation.Debt: One thousand bonds were issued five years ago at a coupon rateof 11%. They had 20-year terms and $1,000 face values. They are nowselling to yield 9%. The tax rate is 37% Preferred stock: Twothousand shares of preferred are outstanding, each of which pays anannual dividend of $7.50. They originally sold to yield 15% of their$50 face value. They're now selling to yield 11%. Equity: GreatCorp has 108,000 shares of common stock outstanding, currently sellingat $18.48 per share. Use the risk premium approach and assume a 3% riskpremium