..ll touch 6:47 PM 69% docs.google.com Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. The firm has $400,000 of debt outstanding, $200,000 of preferred stock, $300,000 of retained earnings and $300,000 of new common stock. The firm's bonds mature in 20 years and have a 10% yield to maturity. The company's tax rate is 40%. The firm's preferred stock currently sells for $80 a share and pays an annual dividend of $11. . The firm is expected to pay a $2.50 dividend at year end (D1 = $2.50), the dividend is expected to grow at a constant rate of 5.50% a year, and the common stock currently sells for $52.50 a share. The issuance of new common stock would incur the firm 6% flotation cost. 1. The weight of debt is: * O A. $400,000 B. 16.67% C. 33.33% D. 25% O E. None of the above ..ll touch @ 69% 6:47 PM docs.google.com 2. The weight of preferred stock is: A. $200,000 B. 33.33% C. 16.67% D. 25% E. None of the above 3. The weight of common stock from retained earnings is; * O A. $300,000 B. 33.33% O C. 16.67% D. 25% O E. None of the above ..Il touch 69% 6:47 PM docs.google.com 4. The weight of external equity is: A. $600,000 B. 33.33% O C. 16.67% D. 25% E. None of the above 5. The after tax cost of debt is: A. 10% O B.4% C. 6% O D. 14% E. None of the above @ 69% ..ll touch 6:47 PM docs.google.com 6. The cost of preferred stock is: A. 14% O B.6% C. 13.5% D. 13.75% E. None of the above 7. The cost of common equity using retained earnings is: * O A. 13.75% B. 10% C. 10.26% D. 10.57% O E. None of the above ..Il touch 69% 6:47 PM docs.google.com 8. The cost of external equity is: * A. 13.75% B. 10.26% C. 6% D. 10.57% E. None of the above 9. The Weighted Average Cost of Capital (WACC) is: * O A. 19.50% B. 10.29% C. 9.50% D. 15% O E. None of the above