a) You have just been hired to compute the cost of capital for debt, preferred stock, and common stock for the Mindflex Corporation.

Cost of common equity: Mindflexs common stock paid a $1.25 dividend last year. In addition, Mindflexs dividends are growing at a rate of 6% per year and this growth rate is expected to continue into the foreseeable future. The price of the stock is currently $30.

Cost of debt: Now lets assume that Mindflexs bonds are frequently traded. A Mindflex bond has a $1000 par value (face value) and a coupon rate of 13% that is paid semiannually. The bonds are currently selling for $1,125 and will mature in 20 years. Mindflexs corporate tax rate is 34%.

Cost of preferred stock: Mindflexs preferred stock pays a 10% dividend on a $1.25 par value. However, the market price at which the preferred shares could be sold is only $90.

The target capital structure is 50% common stock, 15% preferred stock, and 35% debt. What is the Weighted Average Cost of Capital?

PLEASE ALL STEP BY STEP CALCUATIONS