1.(Weighted average cost of capital) In the spring of last year, Tempe Steel learned that the firm would need to re-evaluate the company's weighted average cost of capital following a significant issue of debt. The firm now has financed 49 percent of its assets using debt and 51 pecent using equity. Calculate the firm's weighted average cost of capital where the firm's borrowing rate on debt is 8.2p ercent, it faces a 35 percent tax rate, and the common stockholders require a 20.3 percent rate of return.

Tempe Steel's weighted average cost of capital is %. (Round to three decimal places.)

2. (Flotation costs)The Pandora Internet Radio Company was started in 2000 to provide a personalized radio listening experience over your computer or iPhone and is privately owned. However, its success could easily lead its owners to take the company public with the sale of common stock to the public. When companies sell common stock for the first time the flotation cost can be very high. If Pandora needs $75 million to finance an acquisition and sells shares to the public, how much stock would they have to sell if flotation costs are expected to be 11 percent?

The flotation cost adjusted initial outlay is $ (Round to the nearest dollar.)

3. (Cost of preferred stock)The preferred stock of Walter Industries Inc. currently sells for $36.44 a share and pays $2.42 in dividends annually. What is the firm's cost of capital for the preferred stock?

The firm's cost of capital for the preferred stock is %. (Round to two decimal places.)