East Realm is financed with

35%

debt,

50%

equity, and

15%

preferred stocks.\ EQUITY: East Realm current dividend is

$5

, and it is expected to grow at a rate of

4%

each year. The stock price for East Realm is

$60

. East Realm ha

$350

million in retained earnings that can be used as a source of internal equity financing. Any equity capital more than

$350

million needs to be sourced with issuance of external equity at net proceeds of

$57

.\ DEBT: East Realm can borrow up to

$300

million from a local bank at the before-tax rate of

6%

. To raise more debt, East Realm has to issue a 10-year bond with a coupon rate of

8%

at net proceeds of

$940

per

$1,000

face value.\ PREFERRED: East Realm's preferred stock pays constant dividend of

$4

and is priced at

$35

. East Realm preferred stock has a

$1

issuance cost. P net\ Lastly, East Realm's tax rate is

35%

.

East Realm is financed with 35% debt, 50% equity, and 15% preferred stocks. EQUITY: East Realm current dividend is $5, and it is expected to grow at a rate of 4% each year. The stock price for East Realm is $60. East Realm has $350 million in retained earnings that can be used as a source of internal equity financing. Any equity capital more than $350 million needs to be sourced with issuance of external equity at net proceeds of $57. DEBT: East Realm can borrow up to $300 million from a local bank at the before-tax rate of 6%. To raise more debt, East Realm has to issue a 10 -year bond with a coupon rate of 8% at net proceeds of $940 per $1,000 face value. PREFERRED: East Realm's preferred stock pays constant dividend of $4 and is priced at $35. East Realm preferred stock has a $1 issuance cost. Pnet Lastly, East Realm's tax rate is 35%