Average Cost Of Capital: Determining What Discount Rate (WACC)

Assignment Steps
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Scenario: You work for an investment banking firm and have been asked by management of Vestor Corporation (not real), a software development company, to calculate its weighted average cost of capital, to use in evaluating a new company investment. The firm is considering a new investment in a warehousing facility, which it believes will generate an internal rate of return of 11.5%. The market value of Vestor's capital structure is as follows:
Source of Capital
Market Value
Bonds
$10,000,000
Preferred Stock
$2,000,000
Common Stock
$8,000,000
To finance the investment, Vestor has issued 20 year bonds with a $1,000 par value, 6% coupon rate and at a market price of $950. Preferred stock paying a $2.50 annual dividend was sold for $25 per share. Common stock of Vestor is currently selling for $50 per share and has a Beta of 1.2. The firm's tax rate is 34%. The expected market return of the S&P 500 is 13% and the 10-Year Treasury note is currently yielding 3.5%.
Determine what discount rate (WACC) Vestor should use to evaluate the warehousing facility project.
Assess whether Vestor should make the warehouse investment.
Prepare your analysis in a minimum of 500 words in Microsoft® Word.
Use Microsoft® Word tables in the presentation if you choose.
Show all calculations and analysis in the presentation.
Format your assignment consistent with APA guidelines.
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These are the two most important parts of this assignment
Determine what discount rate (WACC) Vestor should use to evaluate the warehousing facility project.
Assess whether Vestor should make the warehouse investment.
Could you please make sure they are a really good part of the entire assignment
Thank you very much. This saves me a lot of time.