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3. (12 marks) You are given the following information for TC Energy. Assume the companys tax rate is 20%. Debt: 250,000 8 percent semi-annual coupon

3. (12 marks) You are given the following information for TC Energy. Assume the companys tax rate is 20%. Debt: 250,000 8 percent semi-annual coupon bonds outstanding, $1000 par value, 15 years to maturity, selling for 102 percent of par. Common Stock: 1.4B shares outstanding. The 3-month T-bill rate is 1%, the market rate of return is 15% and the stock has a beta value of 0.86. The stock is currently trading at $65. Preferred Stock: 430,000 shares of 2 percent preferred stock outstanding, currently selling for 106 percent of par per share. a. What is the TC Energys capital structure? (i.e. find the weights) (5 marks) b. What is the cost of debt? (2 marks) c. What is the firms cost of equity? (2 marks) d. What is the firms cost of preferred stock? (1 mark) e. What is firms WACC? (2 marks)

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