1)

Debt	31,000 bonds with a 5.0% coupon rate, payable annually, 15 years to maturity, selling at $1,050 per bond.
Common Stock	754,000 shares of common stock outstanding. The stock sells for a price of $70 per share and has a beta of 1.06.
Preferred Stock	263,000 preferred shares outstanding, currently trading at $70.02 per share; with an annual dividend payment of $8.07,
Market	The market risk premium is 14% and the risk free rate is 3%
Tax Rate	31%

What is the after tax cost of debt (R_d)? (Answer as a percentage and round to 2 decimals)

a. 4.19 %

b. 6.12 %

c. 3.13 %

d. 0.84 %

e. 0.28 %

What is the cost of common stock (R_E)? (Answer as a percentage and round to 2 decimals)

a. 14.99 %

b. 15.55 %

c. 18.90 %

d. 20.83 %

e. 17.84 %

What is the before tax cost of debt (R_d)? (Answer as a percentage and round to 2 decimals)

a. 4.53 %

b. 5.59 %

c. 1.68 %

d. 2.24 %

e. 7.52 %

What is the cost of preferred stock (R_p)? (Answer as a percentage and round to 2 decimals)

a. 14.52 %

b. 12.59 %

c. 11.53 %

d. 8.68 %

e. 9.24 %

What is the weighted average cost of capital? (Answer as a percentage and round to 2 decimals)

a. 15.09 %

b. 12.10 %

c. 9.25 %

d. 13.16 %

e. 9.81 %