7. 9.

The Evanec Company's next expected dividend, D1, is $2.65; its growth rate is 5%; and its common stock now sells for $38.00. New stock (external equity) can be sold to net $30.40 per share. a. What is Evanec's cost of retained earnings, rs ? Do not round intermediate calculations. Round your answer to two decimal places. rs=% b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F=% c. What is Evanec's cost of new common stock, ree ? Do not round intermediate calculations. Round your answer to two decimal places. re=% The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 8%, and its marginal tax rate is 25%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and Iong-term debt, equals $1,140. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. Calculate Paulson's WACC using market-value weights. Do not round intermediate calculations. Round your answer to two decimal places. %