1. Capital structure is 40% debt, 10% preferred stock, and 50% common equity

Common stock currently sells for $27.00

The expected CS dividend is $0.50

Growth rate is 8.00%

Flotation cost on CS $1.25

Flotation cost on PS $1.10

Preferred stock sells for $46.00

PS pays a dividend of $5.00

Market yield on bonds is 9.00%

Tax rate is 34.00%

Calculate the firm's cost of debt

A. 5.94%

B. 9.85%

C. 11.14%

2.

Capital structure is 40% debt, 10% preferred stock, and 50% common equity
Common stock currently sells for	$27.00
The expected CS dividend is	$0.50
Growth rate is	8.00%
Flotation cost on CS	$1.25
Flotation cost on PS	$1.10
Preferred stock sells for	$46.00
PS pays a dividend of	$5.00
Market yield on bonds is	9.00%
Tax rate is	34.00%

Calculate the firm's cost of preferred stock

A. 9.85%

B. 9.00%

C. 11.14%

3.

Capital structure is 40% debt, 10% preferred stock, and 50% common equity
Common stock currently sells for	$27.00
The expected CS dividend is	$0.50
Growth rate is	8.00%
Flotation cost on CS	$1.25
Flotation cost on PS	$1.10
Preferred stock sells for	$46.00
PS pays a dividend of	$5.00
Market yield on bonds is	9.00%
Tax rate is	34.00%

Calculate the firm's cost of retained earnings

A. 5.94%

B. 9.85%

C. 11.14%

4.

Capital structure is 40% debt, 10% preferred stock, and 50% common equity
Common stock currently sells for	$45.00
The expected CS dividend is	$2.00
Growth rate is	6.00%
Flotation cost on CS	$2.25
Flotation cost on PS	$1.10
Preferred stock sells for	$50.00
PS pays a dividend of	$4.00
Market yield on bonds is	11.25%
Tax rate is	34.00%

Calculate the firm's cost of new common stock

A. 10.44%

B. 10.68%

C. 11.25%