Calculation of individual costs and WACC Lang Enterprise is interested in measuring its overall cost of capital. Current investigation has gathered the following data The firm is in the 249 tax bracket Debt The firm can raite debt by selling $1,000-par-value, 4% coupon interest rate, 15-year bonds on which annual internat payments will be made. To set the an average discount of $25 per bond would have to be given. The firm also must pay flotation costs of $35 per bond Preferred stock The firm can sell 6% preferred stock at its S105-per-share par valon. The cont of leaving and selling the preferred stock is expected ter be S8 pershme Preferred stock can be sold under these terms Common stock The firm's common stock is currently selling for $75 per share. The firm expects to pay cash dividende of 57 per share next year. The firm's dividende have been growing at an annual rate of 6%, and this growth is expected to continue into the future. The stock must be underpriced by $7 per share, and folation contre expected to amount to $3 per share. The firm can sell 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 $150.000 retained earnings in the comina vear once these retained earnings are exhausted, the firm will use new common stock on the form of common stock eautyfinancing a. The after-tax cost of debt using the approximation formula is % (Round to two decimal places.) The after-tax cost of debt using the bond's yield to maturity (YTM) %. (Round to two decimal places.) b. The cost of preferred stock is 0%. (Round to two decimal places.) c. The cost of retained eamings is [%. (Round to two decimal places.) The cost of now common stock is 0% (Round to two decimal places) d. Using the cost of retained earnings, the firm's WACC is % (Round to two decimal places) Using the cost of new common stock, the firm's WACCI%. (Round to two decimal places.) IS retained earnings, the firm's WACC is %. (Round to two decimal places.) common std - X Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet) Source of capital Weight Long-term debt 30% Preferred stock 15 Common stock equity 55 Total 100% Done Print