6 V " T " J CRUE r 9 A N M PIC COLLAGE Using the balance sheet provided for Universal Exports, determine the weighted average cost of capital. The firm's tax rate is 40%, the preferred stock pays a dividend of $0.45 per share, the beta of the stock is 1.70, the market risk premium is 8%, and the risk-free rate is 5 %. Assume that the book value capital structure weights are the company's optimal weights. Que 0 Que Que Universal Exports Balance Sheet ($ millions) Assets Liabilities & Owner's Equity Cash and Short-term securities 2 Bonds (8% annual coupon, 10 10-year maturity, 9% YTM) Accounts receivable 3 Preferred stock (market price = $3) Previous Ques Ques Inventories Plant and equipment Total 7 Common stock 20 21 23 33 Total 33 Enter answers as percentages. Round all answers to two deci.... places. a. What is the proportion of debt in the firm's capital structure? 30.3 % b. What is the proportion of preferred stock in the firm's capital structure? 9.09 % C. What is the proportion of common equity in the firm's capital structure? % d. What is the after-tax cost of debt for Universal Exports? 1% d. What is the after-tax cost of debt for Universal Exports? % e. What is the cost of preferred stock for Universal Exports? % f. What is the cost of common equity for Universal Exports? Note that the problem gives us the amount of the market risk premium, which is equal to (km-k):% g. What is the WACC for Universal Exports? %