General Talc Mines has compiled the following data;

Debt: The firm can raise debt by selling 15-year, $1,000 par value, 9% coupon interest rate bonds that pay interest annually. The outstanding bonds have a total face value of $750,000. A flotation cost of 4 percent of the face value would be required in addition to the premium of $10.

Preferred Stock: The firm has 35,000 shares of preferred stock outstanding at a price of $80 a share. It will pay $12 annual dividend. The cost of issuing and selling the stock is $3 per share.

Common Stock: Market Basket Inc. has 100,000 shares of common stock outstanding at a price of $75 a share. The dividend expected to be paid at the end of the coming year is $5. Its dividend payments have been growing at a constant rate for the last five years. Five years ago, the dividend was $3.10. It is expected that to sell, a new common stock issue must be underpriced $2 per share and the firm must also pay $1 per share in flotation costs.

Additionally, the firm has a marginal tax rate of 40 percent.

1. Calculate the cost of each source of financing.
2. Calculate the firm's weighted average cost of capital assuming the firm has been using all retained earnings.
3. Calculate the firm's weighted average cost of capital assuming the firm has exhausted all retained earnings.