JellyBelly, Inc. Given the balance sheet shown below, what is the best estimate for the weights to be used when calculating the WACC? You check the markets and see that the common stock is currently selling for $62.58 per share, the bonds are selling for $1040.25 each, and the preferred stock is selling for $35 per share.

Total Current Assets	360,000	Total current liabilities	201,500
		Long term bonds (150 bonds, $1,000 face)	150,000
		Preferred Stock (10,000 shares outstanding	10,000
		Common stock (40,000 shares outstanding)	40,000
		Retained earnings	208,500
Net fixed assets	250,000	Total common equity	248,500
Total assets	610,000	Total liabilities & equity	610,000

• The current market price of the firm's stock is $26; its last dividend was $2.25, and its expected growth rate is 5.5 percent. JellyBelly can issue new common stock at a 15 percent flotation cost.

a. What is the interest rate (cost) of retained earnings?

b. What is the interest rate (cost) of a new common stock issue?

c. What is the maximum capital budget that JellyBelly can support with retained earnings?

d. Given a $450,000 budget, what will be JellyBellys marginal cost (interest rate) on common equity?

2. Given the balance sheet shown below, what is the best estimate for the weights to be used when calculating the WACC? You check the markets and see that the common stock is currently selling for $62.58 per share, the bonds are selling for $1040.25 each, and the preferred stock is selling for $35 per share.

Total Current Assets	360,000	Total current liabilities	201,500
		Long term bonds (150 bonds, $1,000 face)	150,000
		Preferred Stock (10,000 shares outstanding	10,000
		Common stock (40,000 shares outstanding)	40,000
		Retained earnings	208,500
Net fixed assets	250,000	Total common equity	248,500
Total assets	610,000	Total liabilities & equity	610,000