INKO Corporation has determined its optimal capitature which is composed of the following sources and target market value proportions: Target Market Source of Capital Proportions Long-term debt 20% Preferred stock 10 Common stock equity 70 Debt: The before-tax cost of debt for the firm is 7.7%. Preferred Stock: The firm has determined it can issue preferred stock at $75 per share par value. The stock will pay a $10 annual dividend. The cost of issuing and selling the stock is $3 per share. Common Stock: INKO's common stock is currently selling for $18 per share. The dividend expected to be paid at the end of the coming year is $1.74. Its dividend payments have been growing at a constant rate of 3%. Additionally, the firm's marginal tax rate is 40 percent. a) As the financial director of INKO Corporation, you are required to calculate the Weighted Average Cost of Capital (WACC), clearly outlining each capital cost component: debt, preferred stock and common equity. (20 marks) b) Why is the cost of capital referred to as the required rate of return