3.

You are given the following information concerning Parrothead Enterprises:

Debt:	10,100 7.1 percent coupon bonds outstanding, with 24 years to maturity and a quoted price of 106.75. These bonds pay interest semiannually.
Common stock:	280,000 shares of common stock selling for $65.60 per share. The stock has a beta of .96 and will pay a dividend of $3.80 next year. The dividend is expected to grow by 5.1 percent per year indefinitely.
Preferred stock:	9,100 shares of 4.55 percent preferred stock selling at $95.10 per share.
Market:	A 10.9 percent expected return, a risk-free rate of 5.1 percent, and a 34 percent tax rate.

Required:

What is the firm's cost of each form of financing?(Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimalplaces(e.g., 32.16).)

	Aftertax costof debt	%
	Cost of preferred stock	%
	Cost of equity	%

Calculate the WACC for Parrothead Enterprises.(Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimalplaces(e.g., 32.16).)

WACC

%