Consider the case of Turnbull Co$.$

Turnbull Co$.$ has a target capital structure of $45\%$ debt, $4\%$ preferred stock, and $51\%$ common equity. It has a before$-$tax cost of debt of $11\mathrm{.}1\%,$ and

its cost of preferred stock is $12\mathrm{.}2\%.$

If Turnbull can raise all of its equity capital from retained earnings, its cost of common equity will be $14\mathrm{.}7\%.$ However, if it is necessary to raise new

common equity, it will carry a cost of $16\mathrm{.}8\%.$

If its current tax rate is $25\%,$ how much higher will Turnbull's weighted average cost of capital $($WACC$)$ be if it has to raise additional common equity

capital by issuing new common stock instead of raising the funds through retained earnings? $($Note: Round your intermediate calculations to two

decimal places.$)$

$1\mathrm{.}34\%$

$1\mathrm{.}07\%$

$1\mathrm{.}23\%$

$1\mathrm{.}28\%$

Turnbull $Co.$ is considering a project that requires an initial investment of $$570,000.$ The firm will raise the $$570,000$ in capital by issuing $$230,000$ of

debt at a before$-$tax cost of $11\mathrm{.}1\%,$$$20,000$ of preferred stock at a cost of $12\mathrm{.}2\%,$ and $$320,000$ of equity at a cost of $14\mathrm{.}7\%.$ The firm faces a tax

rate of $25\%.$ What will be the WACC for this project?

$($Note: Round your intermediate calculations to three decimal places.$)$

Consider the case of Kuhn Co$.$

Kuhn Co$.$ is considering a new project that will require an initial investment of $$45$ million. It has a target capital structure of $35\%$ debt, $2\%$ preferred

stock, and $63\%$ common equity. Kuhn has noncallable bonds outstanding that mature in $15$ years with a face value of $$1,000$ an annual coupon rate

of $11\%,$ and a market price of $$1555\mathrm{.}38.$ The yield on the company's current bonds is a good approximation of the yield on any new bonds that it

issues. The company can sell shares of preferred stock that pay an annual dividend of $$8$ at a price of $$95\mathrm{.}70$ per share.

Kuhn does not have any retained earnings available to finance this project, so the firm will have to issue new common stock to help fund it$.$ Its

represent $3\%$ of the funds raised by issuing new common stock. The company is projected to grow at a constant rate of $8\mathrm{.}7\%,$ and they face a tax

rate of $25\%.$ What will be the WACC for this project?

$($Note: Round your intermediate calculations to two decimal places.$)$