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Blue Spoon Ltd has a $300-million-face-value bond issue outstanding. The

bonds carry a 5% coupon rate with interest paid semi-annually and was issued as a 10 year bond four years ago. The bond is currently priced to provide a yield of 4%. Blue Spoon has 10 million preferred shares outstanding. The shares carry a stated dividend of $4.50 per share and are currently trading at $52.57 per share. Par value of the preferred shares is $50.00. Blue Spoon has 25 million common shares outstanding. The current market price of the shares is $35. The shares paid a dividend of $2 per share last year, and investment analysts believe the dividends should grow at an average annual rate of 5% for the foreseeable future. The shares have a beta (β) of 1.50. The risk-free rate is 2.5%, and the market price of risk is 5.6%. Blue Spoon's tax rate is 35%.

What is Blue Spoon's Weighted Average Cost of Capital? 

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