Determine the weighted average of capital for following company under these conditions:
I. Income tax is 20 %
II. Preferred stocks have a nominal value of 10 000 USD per share. They are traded for 11 000 USD and guaranteed (promised) a permanent priority dividend 1 000 USD annum per share.
III. Common stocks were issued at a nominal value of 2 000 USD per share. Flotation cost of these new shares were calculated at 50 USD per share. Shares are traded on the market for 2 400 USD per share. Dividend is assumed at 10 % of par value in the first year, where the expected growth of dividends is assumed at 1 % every year.
IV. Long-term loans are provided at a current rate of 1 % every year.
V. Short-term loans have a current rate of 10 %.