The company has $200,000,000 in common stock equity with an estimated 10% annual cost of capital. You recently issued $100,000,000 in corporate bonds that currently pay a 6% annual yield. Finally you hve $100,000,000 in retained earnings with an estimated opportunity cost of 9% per year.
a. What is your weighted average cost of capital? (calculate and show the work)
b. What coud this business do to bring this cost down?