HBM, Inc has the following capital structure:

Assets	$	400,000		Debt	$	180,000
				Preferred stock		20,000
				Common stock		200,000

The common stock is currently selling for $18 a share, pays a cash dividend of $0.50 per share, and is growing annually at 3 percent. The preferred stock pays a $9 cash dividend and currently sells for $96 a share. The debt pays interest of 7.5 percent annually, and the firm is in the 30 percent marginal tax bracket.

1. What is the after-tax cost of debt? Round your answer to two decimal places.

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2. What is the cost of preferred stock? Round your answer to two decimal places.

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3. What is the cost of common stock? Assume that the current $0.50 dividend grows by 3 percent during the year. Round your answer to two decimal places.

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4. What is the firms weighted-average cost of capital? Round your answer to two decimal places.

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