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4. Alpha Corporation has a target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. The company's bonds have

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4. Alpha Corporation has a target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. The company's bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $980. The firm's preferred stock sells for $80 and pays a $10 annual dividend. Rollins is a constant-growth firm which just paid a dividend of $2.00, sells for $30.00 per share, and has a growth rate of 8 percent. The firm's marginal tax rate is 40 percent. a. What is the company's component cost of debt? (Up to 3 points) b. What is the firm's cost of preferred stock? (Up to 1 points) c. What is the firm's cost of equity? (Up to 2 points) d. Calculate the firm's WACC. (Up to 4 points)

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