Cost of capitalEdna Recording Studios, Inc., reported earnings available to common stock of $4, 800,000 last year. From those earnings, the company paid a dividend of $1.19 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 40% debt, 15% preferred stock, and 45% common stock. It is taxed at a rate of 24%.

a)If the market price of the common stock is $45 and dividends are expected to grow at a rate of 7% 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 $7per share, what is the company's cost of new common stock financing?

c)The company can issue $1.98 dividend preferred stock for a market price of $26 per share. Flotation costs would amount to $6 per share. What is the cost of preferred stock financing?

d)The company can issue $1 000-par-value,12% coupon, 13-year bonds that can be sold for $1 comma 300 each. Flotation costs would amount to $40 per bond. Use the estimation formula to figure the approximate after-tax cost of debt financing?

e)Using the cost of retained earnings, rr Subscript r, the firm's WACC, ra Subscript a, is....%.

Using the cost of new common stock, r Subscript n , the firm's WACC, r Subscript a, is....%.