Question

Please show all work. I need to see the formulas in order to understand the question...

Please show all work. I need to see the formulas in order to understand the question

Thank you

You are given the follwing information for Lighting. Co

Debt: 7,500 bonds outstanding with a 7.8% coupon, $1,000 par value, 20 years to maturity, selling for 104 percent of par. These bonds make semiannually payments.

Preferred Stock: 12,000 shares of 5.75% preferred stock outstanding, currently selling for a price of 2.0% below par per share.

Common Stock: 210,000 shares outstanding, selling for $83 per share; beta is 1.15.

Market: 8% market risk premium, 4.2% risk-free rate, and 35% tax rate.

(i) Calculate the specific cost of each source of financing.

(ii) Calculate the firm’s weighted average cost of capital (WACC).

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