FC is considering a new project which would be similar in terms of risk to its existing projects. Thus, you need a discount rate for evaluation purposes. Your firm has enough cash on hand to provide the necessary equity financing for the project. Also, the CFO has reported the following information about the firm's financials:

Common Stock

- 1,000,000 shares outstanding

- Current price is $25 per share

- The stock has a beta of 1.4

- Return on market portfolio is 10%

Preferred Stock

- 150,000 shares outstanding

- Current price is $12.50 per share

- Dividend is $0.5 per share

The firm also has a total of $10,000,000 (par value) is debt outstanding. The debt is in the form of bonds with 10 years left to maturity. They pay semi-annual coupons at a coupon rate of 12% Currently, the bonds sell at %110 of par value.

The risk-free rate is 5%

The firm's tax rate is 40%

Answer the following questions showing all work

1) What is the firm's cost of common stock?

2) What is the firm's cost of preferred stock?

3) What is the firms cost of bond?