5. A company's perpetual preferred stock currently sells for $92.50 per share, and it pays an $8.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock?

6. Bartlett Company's target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common using reinvested earnings is 12.75%. The firm will not be issuing any new stock. You were hired as a consultant to help determine their cost of capital. What is its WACC?

7. Glassmaker Corporation has a current capital structure consisting of $5 million (market value) of 11% bonds and $10 million (market value) of common stock. Glassmaker's beta is 1.36. Glassmaker faces a 40% tax rate. Glassmaker plans on making big changes in operation and capital structure during the next several years. (Its tax rate will remain unchanged.) Under these plans, the free cash flows for Glassmaker are estimated to be $3.0 million for each of the next 4 years; the horizon value of the free cash flows (discounted at the rate assumed by the compressed adjusted present value (CAPV) approach) is $10.0 million at Year 4. The estimated tax savings due to interest expenses are estimated to be $1 million for each of the next 4 years; the horizon value of the tax shields (discounted at the rate assumed by the CAPV approach) is estimated to be $5 million at Year 4. Glassmaker has no nonoperating assets. Currently, the risk-free rate is 6.0% and the market risk premium is 4.0%. Refer to data for Glassmaker Corporation. What is Glassmaker's WACC, based on its current capital structure?