Rainforest Inc. is considering a new product to measure climate change. The project will require millions of investment dollars and expected to yield at 15%annually once the product is established. To finance the operations, Management will issue Bonds, Preferred Stock and Common Stock. 10,000 bonds will beissued to yield 7% before tax, pay semi-annual interest of 9% and mature in 30 years. The Preferred Stock of 200,000 shares will have an annual dividend of$5 per share and a yield of 8%. The Common Stock will not have a dividend but investors expect a 13% yield for this risk and 2,000,000 shares will be issuedat $15 per share. The tax rate will be 10%, Rainforest needs to know the cost of financing, WACC?
A. 10.34%
B. 10.99%
C. 9.62%
D. 11.50%
