12 Teall Develo pment Company hired you as a consultant to help them estimate its cost of capital been provided with the following data: D: $1.45; Po-$22.50; and g-6S0% You have constant). Based on the DCF approach, what is the cost of equity from retained earnings? a. 11.10% b. 11.68% . 12.30% d. 12.94% e. 13.59% 13 Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for S925, and the company's tax rate is 40%, what is the component cost of debt for use in the WACC calculation? a. 4.28% b. 4.46% c. 4.65% d. 4.83% e. 5.03% You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Quigley's WACC? 14 a. 8.15% b. 8.48% c. 8.82% d. 9.17% e. 9.54%