2. The Varian Company's next expected dividend, Di , is $3.18, its growth rate is 6%; and the stock now sells for $36. New stock can be sold to net the firm $32.40 per share What is Varian's percentage flotation cost? What is Varian's cost of new common stock? Flotation Costs Cost of new common stock A. 12% B. 10% C. 12% D. 10% 12.45% 16.77% 19.33% 15.80% 3. Reilly Inc. is trying to determine its cost of debt. The company has a debt issue outstanding with 14 years to maturity that is quoted at 89% of par value. The issue makes semiannual payments and has an embedded cost of 8% annually. What is the pretax cost of debt? If the tax rate is 40%, what is the aftertax cost of debt? Pretax Aftertax A. 8.33% B. 9.43% C. 10.25% D. 8.33% 4.98% 5.66% 6.58% 4. Brealey Corp. has a target capital structure of 40% common stock, 10% preferred stock, and 50% debt. Its cost of equity is 16%, the cost of preferred stock is 7%, and the cost of debt is 12%. If the tax rate is 45%, what is Brealey Corp.'s WACC? A. 12.55% ?. 11.87% C. 10.40% D. 12.98%