2.Lee Corp. has a debt ratio of 3/5.Its 15-year 8% coupon bonds, which pay quarterly

coupons, are selling at 94% of its par value.Its common stock is priced at $40, and just paid a quarterly dividends per share (DPS) of $1.2.It is expected that the quarterly DPS will grow at an annualized rate of 6% indefinitely.

(a)Calculate the WACC for Lee Corp., assuming that the marginal tax rate is 21%.

(b) Given that flotation costs for issuing new debt and new common stock capital are, respectively, 4% and 16%.Calculate (i) the weighted average flotation costs, and (ii) the NPV needed to justify the acceptance of the project, which has an initial investment of $160 million, after taking into account of the flotation costs.Assume that only 25% of equity capital is funded by the issuance of new common stock with 75% financed by retained earnings in your analysis.

(c)Calculate the current yield and capital gain yield of the discount/par/premium (circle your choice) bond issued by Lee Corp.Use your answers and the given information about the bond to discuss precisely THREE different features that support your choice of the bond type.

Question above. Please show all the work necessary for the problem along with calculations rounded to 4 decimal points. THank you!