Afirmhasdetermineditsoptimalcapitalstructurewhichiscomposedofthefollowingsourcesandtargetmarketvalue proportions. Additionally,thefirm'smarginaltaxrateis40percent

SourceofCapitalMarket Proportions

Long-termdebt20%

Preferredstock10

Commonstockequity70

Debt:Thefirmcansella12-year,$1,000parvalue,7percentannualbondfor$880.

PreferredStock:Thefirmhasdetermineditcanissuepreferredstockat$75pershareparvalue.Thestockwillpaya$10 annualdividend.

CommonStock:Afirm'scommonstockiscurrentlysellingfor$30pershare.Thedividendexpectedtobepaidattheendof thecomingyearis$1.5.Itsdividendpaymentshavebeengrowingataconstantrateof 8%

A.What is the firm's cost of common stock?

B.What is the firm's cost of preferred stock?

C.What is the firm's cost of debt?

D.What is the firm's weighted average cost of capital?