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answer me fast please THNKU. Edward Enterprises is interested in measuring its overall cost of capital. Current investigation has gathered the following data. The firm

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answer me fast please THNKU.

Edward Enterprises is interested in measuring its overall cost of capital. Current investigation has gathered the following data. The firm is in the 40% tax bracket. Debt: The firm can raise an unlimited amount of debt by selling $1,000-par value, 8% coupon interest rate, 20-year bonds on which annual interest payments will be made. To sell the issue, an average discount of $30 per bond would have to be given. The firm also must pay flotation costs of $30 per bond. Preferred stock: the firm can sell 8% preferred stock at its $95-per-share par value. The cost of issuing and selling the preferred stock is expected to be $5 per share. An unlimited amount of preferred stock can be sold under these terms. Common stock: the firm's common stock is currently selling for $90 per share. The firm expects to pay cash dividends of $7 per share next year. The firm's dividends have been growing at an annual rate of 6%, and this is expected to continue. The stock must be under-priced by $7 per share, and flotation costs are expected to amount to $5 per share. The firm can sell an unlimited amount of new common stock under these terms. Retained earnings: When measuring this cost, the firm does not concern itself with the tax bracket or brokerage fees of owners. It expects to have available $100,000 of retained earnings in the coming year; once these retained earnings are exhausted, the firm will use new common stock as the form of common stock equity financing. Source of Capital Weight Long Term Debt 30% Preferred Stock 20% Common Stock equity 50% Total 100% Calculate the weighted average cost of capital associated with total new financing

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