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A firm can issue a 15-year, $1,000 par value bond with a 10% coupon rate, paying interest semiannually, at price of $862.35. Their marginal tax

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A firm can issue a 15-year, $1,000 par value bond with a 10% coupon rate, paying interest semiannually, at price of $862.35. Their marginal tax rate is 40%. A dividend of $1.25 was just paid on the firm's common stock, and the firm's estimated growth rate is 8%. It can issue new common stock at $25.00 with a 20% flotation cost. The Risk-free Return is 6%, the Market Return is 12%, and the firm's beta is 1.2. 1. Calculate the firm's Cost of Debt, after-tax. 2. Calculate the firm's Cost of Retained Earnings using the CAPM. 3. Calculate the firm's Cost of new Common Stock

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