Card 22 1.The BMW Company want to raise its capital that is why currently this company has issued corporate bond. The corporate bond issue outstanding of the company is fixed interest rate 8% that pays interest rate twice a year and it will mature in 5 years. The bond is a $1850 face value and it is currently price at $2000. Additionally information, some financial services have a commission fees meaning that the company will have to pay a commission 1.15% of the selling price for a new bond issues. Besides this, the company will also issue preferred stock. Per share will be paid a dividend $20 by the company and per share market price is at $70. The flotation cost on preferred will amount to $10 per share. Apart from, the company's common stock is trading at $80 and its dividends are expected to grow at a constant rate of 8%. The company paid a dividend previous year of $6. The company decide to issue common stock but the company will have to pay a flotation cost per share equal to 3% of selling price. Addition to this, the company decided to use all of their expected retained earnings in the coming year. Therefore, the company's beta is estimated 0.65 by the SML and market risk premium is 8%. US treasury yield 2.88% and Germany treasury yield 1.88%. Additionally, DAX index monthly date. January 15872,46 point, February 15842,13 point, March 16152,86 point, April 16223,99 point, May 16275,38 point, June 16163,36 point, July 15951,3 point, August 15897,93 point, September 15917,24 point, October 15913,82 point, November 15834,91 point, December 15896,23 point. The company tax shield rate 3%. The company has an additional information below. Balance Sheet Value Number outstanding Current Market Price $ 150,000,000 Component Debt Preferred Stock $ 45,000,000 150,000 1,500,000 4,500,000 $1,055 $42 $44 Common Stock $ 180,000,000 Calculate the cost of new debt, cost of equity, cost of preferred stock, the Dividend Growth Model and WACC for the firm