MCBs Food Service Company, Inc. needs to determine its after-tax weighted average costs of capital at book value, market value, and target value. The following information is provided:

1. From the latest Balance Sheet:

Fund Sources

Bonds, $1,000 Par $ 5,000,000

Preferred Stock, 15,000 shares, $100 Par 1,500,000

Common Stock, 500,000 shares, $12 Par 6,000,000

Retained Earnings 42,000,000

2. Component Costs of Capital

Component After-Tax Cost of Capital

Bonds 7.0%

Preferred Stock 9.3%

Common Stock 11.9%

Retained Earnings 10.8%

3. Market Information

1. Bonds Priced @ 95
2. Preferred Stock Market Price @ $72
3. Common Stock Market Price @ $60

4. Target Weights

Component Target Weights

Bonds 35%

Preferred Stock 10%

Common Stock 15%

Retained Earnings 40%