Condensed 2021 Balance Sheet $2,000 3,000 $5,000 $900 100 1,100 250 1,300 1,350 $2,650 $5,000 Current assets Net Fixed assets Total assets Accounts payable and accurals Short term debt Long term debt Preferred Stock (10,000 shares) Common Stock (50,000 shares) Retained earnings Total common equity Total liabilities and equity 2021 Sunrise's earnings per share last year were $3.20. The common stock sells for $52.00, last year's dividend (Do)was $2.25, and a flotation cost of 10% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of 8.8%. Sunrise's preferred stock pays a dividend of $2.90 per share, and its preferred stock sells for $25.00 per share. The firm's before-tax cost of debt is 12%, and its marginal tax rate is 25%. The firm's currently outstanding 10% annual coupon rate, long-term debt sells at par value. The market risk premium is 5.2%, the risk-free rate is 5.5%, and Sunrise's beta is 1.526. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1.2 million. Use this data to answer the questions in the assignment. Question 7 12.5 pts If Sunrise continues to use the same market-value capital structure, what is the firm's WACC assuming that (a) it uses only retained earnings for equity (for cost of equity use the average of your calculated costs via DCF and CAPM) Question 8 12.5 pts If Sunrise continues to use the same market-value capital structure, what is the firm's WACC assuming that (b) if it expands so rapidly that it must issue new common stock