Edna RecordingStudios, Inc., reported earnings available to common stock of $4,000,000 last year. From thoseearnings, the company paid a dividend of $1.21 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 25% debt, 10% preferredstock, and 65% common stock. It is taxed at a rate of 23%.

a.If the market price of the common stock is $49 and dividends are expected to grow at a rate of 5% per year for the foreseeablefuture, what is thecompany's cost of retained earnings financing?

b.If underpricing and flotation costs on new shares of common stock amount to $6 pershare, what is thecompany's cost of new common stock financing?

c.The company can issue $2.02 dividend preferred stock for a market price of $32per 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% coupon, 13-year bonds that can be sold for $1,200 each. Flotation costs would amount to $30 per bond. Use the estimation formula to figure the approximateafter-tax cost of debtfinancing?

e.What is the WACC?