Help me with questions 7,8 and 9

(a) Estimate the cost of preferred stock (required return of preferred stock). (b) Redo question 3 including preferred stock as a financing source, and assume the target weights are as follows: notes, 5 percent; bonds, 40 percent; preferred, 5 percent; equity, 50 percent. What additional information would you like in order to make more informed estimates about the cost of equity and the cost of preferred stock? (a) What would you guess is the market value of the firm's notes payable? Explain. (b) Taylor has one long-term debt security outstanding with of 7 percent. It is a debenture issue maturing in 10 years, and interest is paid semiannually. Determine the debenture's current market value assuming that all principal will be paid in 10 years. Assume also that the bond's semiannual required return is 4 percent. (c) The MV/BV ratio is 1.15. Calculate the market value of Taylor's stock. (d) Estimate Taylor's cost of capital or required return assuming that these market values are consistent with the financing weights desired by management. (You may ignore preferred stock.) (a) Argue for using market values to determine a firm's required return (cost of capital). (b) Argue for using book values. (a) Apparently the 30 percent hurdle rate used by Taylor exceeds its actual cost of capital or required rate of return. Let us suppose a company errs in the other direction and chooses a hurdle rate considerably less than its actual cost of capital. What difficulties could this cause? (b) West believes that Taylor's high cost of capital encourages managers to develop overly optimistic cash flow forecasts. Is a more accurate cost- of capital estimate likely to reduce this bias, as he apparently thinks? Explain your