HBM, Inc has the following capital structure:

Assets	$	600,000		Debt	$	180,000
				Preferred stock		90,000
				Common stock		330,000

The common stock is currently selling for $14 a share, pays a cash dividend of $0.90 per share, and is growing annually at 5 percent. The preferred stock pays a $5 cash dividend and currently sells for $98 a share. The debt pays interest of 8.0 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 $0.90 dividend grows by 5 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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