Excel Activity: Calculating the WACC Here is the condensed 2021 balance sheet for Skye Computer Company (in thousands of dollars): Skye's earninge per share last year were $3,40. The common stock selis fr $55,00, last year's dividend (D0) was $2.40, and a flotation cost of 11% would be required to sell new common stock. Secunty analysts are projecting that the common cividend will grow at an annual rate of g\%. 5kye 's preferred stock pays a dividend of 53.50 per share, and its prefemed stock sells for 535.00 per share. The firm's before-tax cost of debt is 8%, and its marginal tax rate is 25%. The firm's currenth outstanding 8% antual coupon rate, long-term debt sells at par value. The market risk premium is 6%, the risk-tree rate is 7 thi, and Skye's beta is 1.442. The firmit total debt, Which is the surn of the company's short-term debt and long-term debt, equals $1.175 million. The data has been collected in the Microsoft Excel file below. Downlosd the spreadsheet and perform the required analysis to answer the questions below. Da not round The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do nict round intermediate calculations. Round yout answers to two decimal ploces. X a. Calculate the cost of each capital component, that is, the after-tax cost of debt, the cost of preferred stock, the cost of equity from retained earnings, and the cost of rewly issuied common stock. Use the DCi method to find the cost of comnon equity. After-tax cost of debt: Cost of preferred stock: Cost of retained earningsi Cost of new common stockt b. Now calculate the cost of common equity from retained earnings, using the Carm method. Q0 c. What is the cost of new common stock based on the CAPIA? (Hint: Find the difference between r0 and rs as determined by the DCl method, and add that differential to the CAPM value for r4 ) 10 After-tax cost of debt: Cost of preferied rtock: Cost of retained earnings: Cost of new common stock: b. Now calculate the onst of common equity from retained camings, using the CAPM method. C. What is the cost of new enmmon stock. based on the CAPM? (Hint: Find the difference between re and is as deternined by the DCF method, and add that differentiol to the CAPM value for r1 ) d. If Skye continues to use the satne market-value capital structure, what is the firm's WacC assuming that (1) it uses only retained earmings for equify and (2) if it expands so rapidly that it must issue new common stock? (Hint. Use the market value capital structure excluding carrent lustilities to deterinine the weightsAlso, use the simple sverage of the required values obtained under the two methods in calculating wACC.)