1. Pure Michigan issued a bond with the following features: (2.5 Points) Maturity: 15 years Coupon rate 5.0% per annum, but paid semi-annually Par Value: $1,000 Each bond was sold today for $792.99 but had to pay 2.0% flotation expenses. A total of 5,675 bonds were sold. BEFORE-TAX Cost of DEBT = 7.5% 2. Pure Michigan also issued the following Preferred Stock: (2.5 Points) Coupon rate 4.0% per annum, and paid annually Par Value: $100 Each Preferred was sold at $101 but had to pay 2.0% flotation expenses. A total of 7,426 Preferred Stocks were sold. Cost of Preferred Stock = 4.04% 3. Pure Michigan also issued Common Stocks. (2.5 Points) Common Stocks were sold at $45.00 per share but had to pay 7.0% in flotation expenses. A total of 216,667 shares are outstanding. Dividend just paid = $3.50 Dividend Payout ratio = 40.0% ROE: 11.67% Cost of equity = 15.95% 4. What is Pure Michigan's Cost of Capital (WACC)? (2.5 Points) Their marginal tax rate = 30.0%