Common Stock (with beta 1.2) $7,000,000 Debt $3,000,000 Preferred Stock (Price $100 per share; flotation cost...

Common Stock (with beta 1.2)	$7,000,000
Debt	$3,000,000
Preferred Stock (Price $100 per share; flotation cost $2 per share)	$2,000,000
Yield to Maturity	6%
Corporate tax rate	30%
Preferred stock dividend	$4
Risk free rate	5%
Market rate of return	12%

Required:

Given the above information, calculate the weighted average cost of capital (WACC) for Big Mart Inc.

Why it is important for Big Mart Inc. to calculate WACC?

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