25. Preferred stock is paying an annual dividend of $9.50 and is currently trading at $79.16. Assume floatation costs of 12%. What is the cost of preferred stock?

26. Hatter Inc. has the following capital components and costs. Calculate Hatter's WACC. Tax rate 30%

Component Value Cost

Debt 15,500 10%

Preferred Stock 7,500 12%

Common Equity 10,000 14%

27. A project requires an initial outlay of $90,000, and is expected to generate annual net cash inflows of $28,000 for the next 5 years. Determine the internal rate of return of this project.