Consider Higgins Production which has the following information about its capital structures:

• Debt - 1,500, 5 percent coupon bonds outstanding, $1,000 par value, 7 years to maturity, selling for 80 percent of par, the bonds make semiannual payments

• Common Stock - 100,000 shares outstanding, selling for $45 per share; the beta is 0.80

• Preferred Stock - 25,000 shares of 6 percent preferred stock outstanding, currently selling for $150 per share

• Market Information - 6 percent market risk premium and 4 percent risk-free rate.

Required: Calculate to the following if the company has a tax rate of 36 percent.

i. Total Market Value for the Firm $ Answer

ii. After-tax cost of Debt Answer

%

iii. Cost of Equity Answer

%

iv. Cost of Preferred Stock Answer

%

v. Weighted Average Cost of Capital Answer

%