A stock's beta is 1.22, the tax rate is 41%, and the market risk premium is 5.5% per year. The company's next dividend is expected to be $0.87 per share and the stock price is $17.49 per share. The riskiness of the company's equity requires that it provide a risk premium of 4.3% per year over the yield on its long-term debt. If the expected market return is 10.1% per year, what is the company's annual cost of retained earnings financing? 1) 11.3% 2) 11.8% 3) 11.6% 4) 12.2% 5) 12.4% The yield to maturity on a company's debt is 6.6% per year, its cost of preferred stock financing is 7.3% per year, and its cost of equity financing is 12.6% per year. The company's tax rate is 34%. If the company's capital structure is 60% debt, 10% preferred stock, and 30% equity, what is the company's annual weighted average cost of capital? 1) 6.94% 2) 7.12% 3) 7.29% 4) 7.47% 5) 7.78%