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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

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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 35% long-term debt, 20% preferred stock, and 45% common stock equity (retained earnings, new common stock, or both). The firm's tax rate is 25% Debt The firm can soll for 51015 a 12-year, 51,000 par-value bond paying annual interest at a 11.00% coupon rate A flotation cost of 25% of the par value is required Preferred stock 850% (annual dividend) preferred stock having a par value of $100 can be sold for $98. An additional fee of S6 por share must be paid to the underwriters Common stock The firm's common stock is currently selling for $59.43 per share. The stock has paid a dividend that has gradually increased for many years, tining rom 52 25 ton years ago to the $384 dividend payment. Do, that the company just recently made of the company wants to ksur new new common stock will sell them $350 below the current market price to attract investors, and the company will pay $2.00 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 band's yield to maturity (YTM) is []% (Round to two decimal places) The after-tax cost of debt using the approximation formula is % (Round to two decimal places) b. The cost of preferred stock is 1% (Round to two decimal places) c. The cont of retained earnings a % (Round to two decimal places) The cont of new common ttock ta . (Round to two decimal places) d. Uning the cost of retained earning the fl'e WACC w % (Round to two decimal places) Uwing the cost of new common stock, the firm's WACCHE (Round to two decimal place) > Enter your answer in each of the answer boxes

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