2. An analyst has gathered the following information about ABC Corporation and the market: The company has a debt-to-equity ratio of 0.65 that reflects its target capital structure Betafor the common stock is 0.9 The risk-free rate of return is 3.8% The expected market risk premium is 6% Current market price per share of common stock is $105 Current dividend per share of common stock is $5.10 The expected constant dividend growth rate is 5.7% Theflotation costs for issuing new common stock are 3% of proceeds The company has decided to issue $1,000 face value bonds with a 10% coupon paid quarterly and a 14-year maturity at $1000 per bond. ABC Corporation has a tax rate of 35% a. What weights should you use in the weighted average cost of capital calculations for ABC Corporation? Answer: b. What is ABC's cost of equity using the CAPM approach? Answer: c. What is ABC's cost of new equity usingthe dividend discount model approach (with flotation costs)? Answer: d. What is ABC's after-tax cost of debt? Answer: e. Using the CAPM approach for the cost of equity, what is ABC's weighted average cost of capital