Calculate de weighted average cost of capital (WACC) for the company?

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Detailed forecasts of the product鈥檚 expected cash flow have been made. It is estimated that an initial capital investment of $5.2 million is required.

The company鈥檚 authorized share capital consists of 6 million ordinary shares, each with a nominal value of 50 cents. During the last five years the shares in issue has remained constant at 3 million, and the market price per share is 135 cents ex div. The dividend paid in December 2006 was 16 cents per share, with a constant growth of 7% per annum.

The company has 1 million 12%, 25 cents preference in issue, with a market price of 75 cents per share. It also has $800 000, 8% debentures, redeemable in four years鈥?time with a current yield-to-maturity of 11%.

The company also has outstanding a $500 000 bank loan repayable in eight years鈥?time. The rate of interest on this loan is fixed at 1.5% above the bank鈥?base rate which is currently at 12.5%