Enphase Energy, Inc. can obtain funds for future investments through retained earnings, new issues of

common stock, issuance of debt, and issuance of preferred stock. The Board of Directors believe an

appropriate capital structure is one where funds are acquired in the following mix: $60\%$ debt, $10\%$

preferred stock, and $30\%$ common stock. New issuance or flotation costs for the issuance of new

securities amount to $2\%$ for debt, $4\%$ for preferred stock, and $7\%$ for common stock. Enphase Energy

has $$180$ million available in retained earnings and has a marginal tax rate of $28\%.$

If Enphase Energy sells a new issue of bonds that pay a $7\%$ semi$-$annual coupon and mature in $30$

years, these bonds can be sold for $$1,142\mathrm{.}85.$ If Enphase Energy sells a new issue of preferred stock

that pays a $$3\mathrm{.}00$ dividend these shares of preferred stock can be priced at $$26\mathrm{.}25.$ If Enphase Energy

sells a new issue of common stock the dividends paid are expected to be the same as those dividends

of the current common stock outstanding. Enphase Energy just paid a dividend on shares of their

common stock of $$1\mathrm{.}55(D_0=$$$1\mathrm{.}55)$ and in the recent past dividends have grown at a rate of $9\%.$ This

growth rate is expected to continue into the foreseeable future for common stock. Common stock

currently sells for $$13\mathrm{.}72$ a share.

A$.$ What is Enphase Energy after$-$tax cost of a new issue of debt? $(5$ pts$)$

B$.$ What is Enphase Energy cost of new preferred stock? $(4$ pts$)$

C$.$ What is Enphase Energy cost of retained earnings? $(4$ pts$)$

D$.$ What is Enphase Energy cost of new common stock? $(3$ pts$)$

E$.$ What is Enphase Energy breakpoint, where the cheapest combination of funds is exhausted? $(3$ pts$)$

F$.$ What is Enphase Energy WACC ${?}_1,$ based on the cheapest combination of funds? $(3$ pts$)$

G$.$ What is Enphase Energy $WAC{C}_2,$ based on the more expensive combination of funds? $(3$ pts$)$