Timmy’s Inc. has the following optimal capital structure: 25% debt 10% preferred stock and 65% common equity. Its tax rate is 40%. Bonds outstanding are currently selling for 949.67. They mature in 7 years pay an annual coupon of 8% and have a face value of $1 000. The current dividend on common stock is $4; dividends are expected to grow at 3% and the stock is currently selling for $32. The current market price of preferred is $64. And the preferred dividend is $8. What is Timmy Inc’s WACC? Can you show all work please
