Determsining the Cost of Capital Weighted Average Cost of Capital The firn's target captal structure is the mac of debt, preferred stock, and common equity the firm plans to raise funds for its future projecta. The tacget proporticat of debti;praferred steck; and common equity, along with the cost of these componenti; ace used to caloulate the firm's waightad ayerage cdat of caprab (WACC), If the firm well not have to issue nes commen stock, then the cest of retained earnings is used in the firm's WAcC calculation. However, if the firm will have to issue new common steck, the cost of newicomemon stock sbould be used in the firm's WicC calculationt, Quantitative Problens: Barton industries expects that its target capial strucfure for raising fundo in the future for its capital budget aill consist of 49 de deth capcar (WhCCi) if a ules felaned earnings at ite source of common equity) Do not round intermediate caiculatione. Round your aniwer to thies ilecimal olaces. to three decthal places. Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's welghted average cost of cepital (WACC). If the firm will not have to lisue new common stock, then the cost of retained earnings is used in the firm's WaCC calculation. However, If the firm will have to issue new common stock, the cost of new common stock should be used in the firm's WACC calculation. Quantitative Problemt Barton industries expects that its target capital structure for raising funds in the future for its cepial budget will consist of 40 sb debt, 596 preferred stock, and 55w common equity. Note that the firmis marginal tax rate is 4096 . Assume that the firm's coat of debt, fal is 6.57h, the firm's cost of prefecred stock, fosi is 60 and the firm's cost of equity is 10.5% for old equity, fy, and 10.92%4 for new equity, fei What is the firm's weighted averege cost of capital (WACC,) if it uses retained eamings as its scurce of common equity? Do not round intermediate calculations. Round your anser to three decinel glaces. What is the firm's weighted average cost of capital (WACC.) if it has to lasue new common stock? Do not round intermediate caiculations. Round your answer. to three decimal placen