long-term debt, 15% preferred stock, and 40% common stock equity (retained earnings, new common stock, or both). The firm's tax rate is 27%. Debt The firm can sell for $1000 a 15 -year, $1,000-par-value bond paying annual interest at a 9.00% coupon rate. A flotation cost of 2% of the par value is required. Preferred stock 7.50% (annual dividend) preferred stock having a par value of $100 can be sold for $98. An additional fee of $3 per share must be paid to the underwriters. wants to issue new new common stock, it will sell them $2.00 below the current market price to attract investors, and the company will pay $2.00 per share in flotation costs. a. Calculate the after-tax cost of debt. b. Calculate the cost of preferred stock. c. Calculate the cost of common stock (both retained earnings and new common stock). d. Calculate the WACC for Dillon Labs. a. The after-tax cost of debt using the bond's yield to maturity (YTM) is 'o. (Round to two decimal places.)