$100,000 200,000 200,000 100,000 Risk free rate 2% Tax rate 40% Effective interest of debt 15% Market rate of return 12% > Beta 1.6 > FMV of preferred stock $500,000 B/S Current Assets Current Liabilities Cash Account Receivable $70,000 Inventory 50,000 Noncurrent Liabilities 80,000 Common Stock Total Current Assets 200,000 Preferred stock 10,000 Par $10 (Dividend $6 declared and paid) Total Noncurrent Assets 500,000 Retained Earnings Total Assets 700,000 Total Shareholder Equity and Liabilities (Hint: You should use the formula that is dividend paid divided by FMV of preferred stock) Please fill in the answer column Requirements Answer (% or amount) a. CAPM market risk premium b. CAPM cost of common stock c. Cost of preferred stock d. Cost of debt(after tax) e. Cost of retained earnings f. Weighted average cost of capital g. Amount of total capital structure 100,000 70,0000