Excel Actovity: Calculating the WACC Here is the condensed 2021 balance sheet for Skye Computer Company (in thousands of dollars): Skye's earnings per share last year were $2.90. The common stock selis for $65.00, fast year's dividend (D0) was $2.20, and a flotation cosit of 10% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of tow. Skye's preferred stock pays a dividend of $3.00 per share, and its preferred stock sells for $30,00 per share. The firm's before-tax cost of debe is 11 . 3 , and its marginal tax rate is 25%. The firm's currently outstanding 11% annual coupon rate, long-ferm debt sells at par value. The market risk premium is 5%. the risk-free rate is 6%, and Skye's beta is 1.214 . The firm's total debt, which is the sum of the company's short-term debt and long-term debc, equals 50.9 milion. The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analyis to answer the questiofs below. Do not round intermediate calculations. Round vour answers to two decimal places. 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 newly issued common stock. Use the DCF method to find the cost of common equity. After-tax cost of debt: % Cost of preferred stock: % Cost of retained earnings: % Cost of new common stock: % b. Now calculate the cost of common equity from retained earnings, using the CAPM method. % c. What is the cost of new common stock based on the CAPM? (Hint: Find the difference between re and rn as determined by the DCr methid, and add that differential to the CAPM value for rs ) % d. If Skye continues to use the same market-value capital structure, what is the firm's WACC assuming that (1) it uses only retained earnungs for equity and (2) if it expands so rapidly that it must issue new common stock? (Hint: Use the market value capital stricture excluding current liabilities to determine the weights. Also, use the simple average of the required values obtained under the two methods in calcilating WACC) WACC 1:% WACC 2=