Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $$4,400,000$ last year. From those earnings, the company paid a

dividend of $$1\mathrm{.}24$ on each of its $1,000,000$ common shares outstanding. The capital structure of the company includes $30\%$ debt, $20\%$ preferred stock, and $50\%$

common stock. It is taxed at a rate of $21\%.$

a$.$ If the market price of the common stock is $$43$ and dividends are expected to grow at a rate of $9\%$ per year for the foreseeable future, what is the company's cost of

retained earnings financing?

b$.$ If underpricing and flotation costs on new shares of common stock amount to $$7$ per share, what is the company's cost of new common stock financing?

c$.$ The company can issue $$1\mathrm{.}62$ dividend preferred stock for a market price of $$34$ per share. Flotation costs would amount to $$2$ per share. What is the cost of

preferred stock financing?

d$.$ The company can issue $$1,000-$par$-$value, $11\%$ annual coupon, $9-$year bonds that can be sold for $$1,180$ each. Flotation costs would amount to $$40$ per bond. What

is the after$-$tax cost of debt financing?

e$.$ What is the WACC?

a$.$ If the market price of the common stock is $$43$ and dividends are expected to grow at a rate of $9\%$ per year for the foreseeable future, the company's cost of retained

earnings financing is $\%.($Round to two decimal places.$)$

b$.$ If underpricing and flotation costs on new shares of common stock amount to $$7$ per share, the company's cost of new common stock financing is $\%.($Round to

two decimal places.$)$

c$.$ If the company can issue $$1\mathrm{.}62$ dividend preferred stock for a market price of $$34$ per share, and flotation costs would amount to $$2$ per share, the cost of preferred

stock financing is $\%.($Round to two decimal places.$)$

d$.$ If the company can issue $$1,000-$par$-$value, $11\%$ coupon, $9-$year bonds that can be sold for $$1,180$ each, and flotation costs would amount to $$40$ per bond,

the after$-$tax cost of debt financing is $\%.($Round to two decimal places.$)$

e$.$ Using the cost of retained earnings, $r_r,$ the firm's WACC, $r_a,$ is $\%.($Round to two decimal places.$)$

Using the cost of new common stock, $r_n,$ the firm's WACC, $r_a,$ is $\%.($Round to two decimal places.$)$