Calculation of individual costs and WACC Olon Labs has anked its financial manager for the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average coste measured by wing the following weight 50% fong-term diebt 10% pred stock and 40%.com stock equity tearings, new common stock or both) The's tax rates 24% Debit The form can Doll for 51020 a 16-year $1.000 parabond paying annual interest at a 700 coupon A flotation cost of 25% of the parvard Preferred stock 750% dividend proleted stock having af 100 can be sold for $94. An actional fee of per share be paid to the underwater Common stock The fins common stock is currently ling for 559 43 per share. The stock has paid a dividend that he gradually need for many yering from 3.00 ten years ago to the 55 12 vidend payment Oy that the company recently made of the company wants to see new common stock im to the current market prices made the company will pay 1400 per share in Bouton costs a. Calculate the after tax costo del Calculate the cost of preferred stock . Colete the cost of common stock both stained aming and new common stock d. Calculate the WACC for Dil a. The au-tax cost of detturing the bonds yuld matury Round to two dedinul places) 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: 50% long-term debt 10% 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 S1020 a 16-year, 51,000-par-value bond paying annual interest at a 7.00% coupon rate A flotation cost of 25% of the par value is required Preferred stock 7 50% (annual dividend) preferred stock having a par value of 5100 can be sold for $94. An additional fee of S6 por share must be paid to the underwriter Common stock The firm's common stock is currently selling for 559 43 per share. The stock has paid a dividend that has gradually increased for many years. rising from 53.00 ten years ago to the $5 12 dividend payment . Do 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 $4.00 per share in flotation costs. a. Calculate the alter-tax cost of debt + a. The after-tax cost of debt using the band's yield to maturity (YTM) 15 L11% (Round to two decimal places) rising from 53.00 ten years ago to the 55.12 dividend payment, Do. dny just it will sell them $3.50 below the current market price to attract investors, and the company will pay $4.00 per 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 %. (Round to two decimal places
