Company A has the following capital structure:

Tax rate is $34\%.$ EPS $($earnings per share$)$ of the company has grown from $$3\mathrm{.}90$ in the start of

$1991$ to $$7\mathrm{.}80$ in the end of $2000$ and its rate of growth is expected to continue way into the

future $($the rate of growth described is compounded$).$ The company's beta is currently estimated

at $1\mathrm{.}2$ while the risk free rate of return is $5\%.$ Company gives out $40\%$ of its earnings as

dividends. Risk premium of market on stocks with average risk is $4\%.$ Stocks are estimated to

have a return $2\%$ more above bond yields.

If floatation cost for new bonds of $10$ years to maturity amount to $5\%$ while that for preferred and

common stocks is $8\%$ and suppose the company will be raising new bonds and issuing new

stocks for the incoming period to maintain their current capital structure, compute the new

weighted average cost of capital.

a$.$ What is the appropriate Ke $($cost of common equity for new issuance$)$ for the WACC?

$($Answer in decimal place value, use $4$ decimal places$).$

b$.$ What is the appropriate kd before tax for the WACC if new bond issuance will be

undertaken?

c$.$ What is the WACC for the company under the scenario of new issuances for all bonds,

preferred stocks and common stocks as it will be needing to raise new capital? $($Answer

in decimal place value, use $4$ decimal places$).$