EXHIBITNINE Target capital structure is a foow Debt 10% Preferred stock 20% Common cauty 645 100 DEBT The firm's bonds have a YTM of 8 percent in today's market. The firm's marginal tax rate is 40 percent PREFERRED STOCK The tem could sell at par, 588 preferred stock which pays a $6.00 dividend and flotation costs of $425 would be incurred CAPM. The company's beats 17. the risk free rate is 4 percent, and the return on an average stock is percent DCF The company is a constant growin tim and they just paid a dividend of 54 B8, the stock sets for $110.00 per share, and they have a constant grow rate of 7 percent OWN-BOND YIELD PLUS RISK PREMIUM: The firm's policy is to use a subjective risk premium of 3.5 percentage points when using the own.bond-yield-plusskreut method to find he The company's NET INCOME for the year is 5765,600 and the payout ratio is 44 percent. 12 What is the firm's cost of common stock (Rre) using the DCF approach? 9.0000% 124100% 11.7469 11.4364% 12.5000