COST OF CAPITAL ASSIGNMENT STEPHANIE'S CAJUN FOODS, INC NEEDS TO DETERMINE THEIR COST OF CAPITAL FOR CAPITAL BUDGETING PURPOSES. THEY HAVE ASSEMBLED THE FOLLOWING INFORMATION: MARKET PRICE OF OUTSTANDING BONDS 95 COUPON RATE - SEMI-ANNUAL PAYMENTS 11.0% MATURITY VALUE $ 1,000 YEARS TO MATURITY 25 FLOTATION COSTS 2% CORPORATE TAX RATE 21% MARKET PRICE OF OUTSTANDING PREFERRED S 50 PAR VALUE $ 25 DIVIDEND (PERCENTAGE OF PAR) 10% FLOTATION COSTS 1% MARKET PRICE OF COMMON STOCK 60 CURRENT STOCK DIVIDEND S 7.50 GROWTH RATE 4.0% FLOTATION COSTS 5.0% TARGET CAPITAL STRUCTURE BONDS 10.00% PREFERRED STOCK 20.00% COMMON STOCK 30.00% RETAINED EARNINGS 40.00% THE CURRENT CAPITAL STRUCTURE, BASED ON BOOK VALUES, APPEARS AS FOLLOWS: BONDS PREFERRED STOCK COMMON STOCK (PAR $10) RETAINED EARNINGS $ 20,000,000 1,000,000 30,000,000 80,000,000 CALCULATE: A) B) THE COMPONENT COSTS OF CAPITAL THE WEIGHTED AVERAGE COST OF CAPITAL AT BOOK VALUE WEIGHTS THE WEIGHTED AVERAGE COST OF CAPITAL AT MARKET VALUE WEIGHTS THE WEIGHTED AVERAGE COST OF CAPITAL AT TARGET VALUE WEIGHTS D)