I have the explanation to the question below, but I need some help understanding the terms, and how to find them.

What does rd = ?

What does wd= ?

What does wc = ?

What does rs = ?

What Does T =?

Thanks for the help

8 .Assume that you have collected the following data for a firm: The yield on the companys outstanding bonds is 7.75%, its tax rate is 40%, the next expected dividend is $0.65 a share, the dividend is expected to grow at a constant rate of 6.00% a year, the price of the stock is $19.00 per share, the flotation cost for selling new shares is F = 10%, and the target capital structure is 45% debt and 55% common equity. What is the firm's WACC, assuming it must issue new stock to finance its capital budget?

a.8.68%

b.7.93%

c.7.78%

d.8.76%

e.7.48% (Answer)

Answer: e

Explanation

YTM 7.75%

Tax rate 40%

D1 $0.65

G 6.00%

P0 $19.00

F 10.0%

Weight debt 45%

Weight equity 55%

After-tax cost of debt = rd(1 T) = 4.65%

Cost of new equity re=D1/(P0 x(1 -F)) + g = 9.80%

WACC = wd(rd)(1 -T) + wc(rs) = 7.48%