A-Rcd Manufacturing Company is trying to calculate its cost of capital for use in making a capital budgeting decision. Mr. Jeter, the vice-president of finance, has given you the following information and has asked you to compute the weighted average cost of capital. The company current y hes outstanding a bond with 10.0 per ent coupon rate and another bond with an 7.6 percent rate. The firm hBs been informed by its investment banker that bonds o equal nsk and credit rating are now selling to yield 10.9 percent. The common stock has a price of $54 and an expected dividend (D1) of $1.74 per share. The historical growth pattern (g) for dividends is as folows: $1.29 143 1.56 1.74 The preferred stock is selling at $74 per share and pays a dividend of $7.00 per share. The corporate tax rate is 3D percent. The fictation cost is 3.0 percent of the selling price for preferred stock. The optimal capital structure for the firm is 20 percent debt, 10 percent preferred stock, and 70 percent common equity in the form of retained earnings. a. Compute the historical growth rate. Do not round intermediate calculations Round your answer to the n rest whole percent and use this value as g Input your answer as a whole percent. Answer is complete and correct. Growth rate 10.0001% b. Compute the coet of capital for the indvidual components in the capilal structure. (Use the rounded whole percent computed in part a for g. Do not round any other intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Answer is complete but nat entirely correct. Weighted Cost Debt Preferred stock Common equty 7.63 | % 8.18 3.22 c. Calculate the weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Answer is complete but nat entirely correct. Weighted Cost 1.53 1 % Debt Preferred stock Common equty Weighted average cost of capital 0.92 9.26 71