McNabb Construction Company is trying to calculate its cost of capital for use in making a capital budgeting decision Mr Reid, the vice-president of finance, has given you the following information and has asked you to compute the weighted average cost of capital The company currently has an outstanding bond with a 10.8 percent coupon rate and another bond with a 11.5 percent rate. The firm has been informed by its investment dealer that bonds of equal risk and credit ratings are now seling to yield 122 percent. The common stock has a price of $99.00 and an expected dividend (o2) of $4.95 per share. The historical growth pattern () for divdends is as follows The preferred stock is selling at $90 per share and pays a dividend of $8.50 per share. The corporate tax rate is 35 percent. The flotation cost is 29 percent of the selling price for preferred stock. The optimum capital structure for the firm is 25 percent debt. 25 percent preferred stock, and 50 percent common equity in the form of retained eamings a. Compute the historical growth rate. (Do not round intermediate calculations. Round the finel to 2 decimal places.) Growth rate b. Compute the cost of capital for the individual components in the capital structure (Do not round intermediate calculations. Round o. Compute the historical growth rate. (Do not round intermediate calculotions. Round the final to 2 decimal places) Growth rate is b. Compute the cost of capital for the individual components in the captal structure. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) c. Calculate the weighted cost of each source of capital and the weighted average cost of capital (Do not round intermediete calculations. Round the final answers to 2 decimal pleces.)