1. (Capital structure weights) Wingate MetalProducts, Inc. sells materials to contractors who construct metalwarehouses, storagebuildings, and other structures. The firm has estimated its weighted average cost of capital to be 8.1% based on the fact that itsafter-tax cost of debt financing was 6 percent and its cost of equity was 9 percent. What are thefirm's capital structure weights(that is, the proportions of financing that came from debt andequity)?

What is the proportion of debtfinancing?

nothing

% (Round to the nearest wholepercentage.)

What is the proportion of equityfinancing?

nothing

% (Round to the nearest wholepercentage.)

1. (Cost of debt) Carraway Seed Company is issuing a $1,000 par value bond that pays 8 percent annual interest and matures in 12 years. Investors are willing to pay $960 for the bond. Flotation costs will be 12 percent of market value. The company is in a 40 percent tax bracket. What will be thefirm's after-tax cost of debt on thebond?

Thefirm's after-tax cost of debt on the bond will be

nothing

%. (Round to two decimalplaces.)

(Cost of internal equity) PathosCo.'s common stock is currently selling for $25.14. Dividends paid last year were $1.20. Flotation costs on issuing stock will be 11 percent of market price. The dividends and earnings per share are projected to have an annual growth rate of 8 percent. What is the cost of internal common equity forPathos?

The cost of internal common equity for Pathos is

nothing

%. (Round to two decimalplaces.)