To fund a project, Khas Food will raise 40% of capital issuing bonds, 10% issuing preferred stock and the rest of the ca

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To fund a project, Khas Food will raise 40% of capital issuing
bonds, 10% issuing preferred stock and the rest of the capital will
be coming from issuing new common stocks. The company will issue
bonds with 8% coupon, having 15 years till maturity. To sell the
issue, an average discount of 2% per bond needs to be offered.
There is an associated flotation cost of 3% of the par value.
Preferred stock of BDT 100 par value paying a 5% dividend can be
sold for BDT 75. The flotation cost of issuing preferred stock is
BDT 3 per share. The company has a beta of 1.1 and sells for BDT 40
a share. The government short term security is yielding 4% and the
market risk premium is 8%. Khas Food is in 35% tax bracket.
Required:
Calculate WACC for Khas Food.