Given the following information

• Market value of debt = $8 million.
• Market value of preferred stock = $10 million
• Total Market Value of assets =$40 million
• Dividend on preferred stock = $1 million
• Tax rate 40%
• Risk free rate = 1%
• Market Risk Premium = 9%
• Beta of the firm = 1.5
• Before tax cost of debt is 7%.

A) Determine the after-tax cost of debt.

B) Determine the after tax cost of common equity.

C) Calculate the cost of preferred stock

D) Determine WACC