FIV Save Question 6, P9-17 (similar Homework: HW Ch9 HW Score: 33.33%, 20 of 60 to) points Part 107 Points: 0 of 10 Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights. 40% long term delt, 25% preferred stock and 35% common stock equity (retained earnings, new common stock, or both). The firm's tax rate is 26% Debt The firm can sell for S1015 a 17-year, 51,000 pw value bond paying annual interest at a 6.00%chupon rate A flotation cost of 3% of the pur value is required Preferred stock 7.50% (annual dividend) preferred stock having a pat value of 5100 can be sold for $90. An additional toe of SA per share must be paid to the underwriters Common stock The firm's common stock is currently selling for $50 per share. The stock has paid a dividend that has gradually increased for many years rising from $2.50 ten years ago to the $4.48 dividend payment. Dy that the company just recently made of the company wants to issue new new common stock, it will sell them $2.50 below the current market price to attract investors, and the company will pay $3.00 per share in Rotation costs. a. Calculate the after-tax cost of debt 1 a. The after-tax cost of debt using the band's yield to maturity (YTM) is N% Round to two decimal places) Porns Part 1 of 7 O Points: 0 of 10 Save Debt The firm can sell for 51015 a 17-year, 51,000-par-value bond paying annual interest at a 6.00% coupon rate. A flotation cost of 3% of the par value is required Preferred stock 7.50% (annual dividend) preferred stock having a par value of 100 can be sold for $90. An additional fee of S4 per share must be paid to the underwriters Common stock The firm's common stock is currently selling for $50 per share. The stock has paid a dividend that has gradually increased for many years, rising from 52 50 ten years ago to the 54 48 dividend payment, Dthat the company just recently made. If the company wants to issue new new common stock, it will sell them $2.50 below the current market price to attract investors, and the company will pay $3.00 per share in flotation costs. a. Calculate the after-tax cost of debt b. Calculate the cost of preferred stock C. Calculate the cost of common stock (both retained earnings and new common stock). d. Calculate the WACC for Dillon Labs en a. The after-tax cost of debt using the bond's yield to maturity (YTM) is [ % (Round to two decimal places.) -te