Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights:

40%

long-term debt,

2020%

preferred stock, and

40%

common stock equity (retained earnings, new common stock, or both). The firm's tax rate is

24%.

Debt The firm can sell for

$1005

a

10-year,

$1,000-par-value

bond paying annual interest at a

11.00%

coupon rate. A flotation cost of

22%

of the par value is required.Preferred stock

8.00%

(annual dividend) preferred stock having a par value of

$100

can be sold for

$88.

An additional fee of

$5

per share must be paid to the underwriters.Common stockThe firm's common stock is currently selling for

$90

per share. The stock has paid a dividend that has gradually increased for many years, rising from

$3.00

ten years ago to the

$4.44

dividend payment,

Upper D 0D0,

that the company just recently made. If the company wants to issue new new common stock, it will sell them

$3.50

below the current market price to attract investors, and the company will pay

$2.002.00

per share in flotation costs.

a.Calculate the after-tax cost of debt.

b.Calculate the cost of preferred stock.

c.Calculate the cost of common stock (both retained earnings and new common stock).

d.Calculate the WACC for Dillon Labs.

a.The after-tax cost of debt using the bond's yield to maturity (YTM) is

nothing%.

(Round to two decimal places.)

Calculation of Individual costs and WACC Dillon Labs has asked its financial manager to measure the cost of each specific bo of capital as well as the weighted average cost of captial. The weighted average cost is to be measured by using the flowing weight: 40% long-ordebt 20% preferred stock, and common stock equity retained ning new common stock, or both. The firm's tax rate is 24% Debt The firm can sel for $1005 a 10-year $1.000 par value bond paying w i nterest a 11.00% upon rate. Allow cost of 2% of the par value is required Preferred stock 8.00% (annual dividend proferred stock having a par value of $100 can be sold for so. An additional fee of $5 per share must be paid to the underwriters Common stock The firm's common stock is currently seling for $10 per share. The stock has paid a vidend the gradually increased for many years. rising from 53.00 ten years ago to the $444 dividend payment that the company candy made the company want to se new common Mock will sell them $3.50 the curren t prot ec t ors, and a company will pay $200 por share infonation coats a. Calculate the after-tax cost of debt b. Calculate the cost of preferred stock c. Calculate the cost of common stock both retained earings and new common stock) . Ce the WACC for Orion Labs ..The tax cost of debt using the band's yield to maturity (Y ) Round to two decimal plus)