Miami Publishing Company is beginning the process of calculating its weighted average cost of capital (WACC).  Their research has shown that they can raise capital under the following conditions:

 

 1.  Bonds can be sold with a par value of $1,000 and a coupon rate of 12% per year, paid semiannually.  The bonds will be non-callable with 15 years to maturity.  The current market price for identical bonds is $975.

 2.  Miami Publishing does not issue preferred stock.

 3.Common stock could be sold.  The most recent semiannual dividend paid by Miami was D₀ = $3.75 per share.  The company's dividends are expected to grow at a rate of 6% per year for the foreseeable future.  The current price of Miami common stock is $175 per share.

 

Based on the information above, calculate the following:

A.  the cost of debt from corporate bonds (Rd)

B.  the cost of preferred stock (Rps)

C.  the cost of common equity (Rce).