A firms common stock is currently trading for $50. Recently, a dividend of $5 per share was paid and dividends are expected to grow at a constant rate of 7%. 8% Preferred stock, par value $40 is selling at $55. Flotation cost on new issues stock issues is 10 percent. The companys bonds, which have eighteen years to maturity, are being sold on the market at a price of $1 100 for every bond with a face value of $1 000. The Bond interest is paid annually; coupon rate is 9%. The company's tax rate is 40 percent.

A. Calculate:

i. The after-tax cost of debt (5 marks)

ii. Cost of preferred stock (4 marks)

iii. Cost of retained earnings (5 marks)

iv. Cost of new common stock