N D Cost of capital Edna Recording Studios, Inc, reported earnings available to common stock of $4,400,000 last year. From those earnings, the company paid a dividend of $1.35 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 35% debt 10% preferred stock, and 55% common stock. It is taxed at a rate of 23% a. If the market price of the common stock is $34 and dividends are expected to grow at a rate of 8% per year for the foreseeable future, what is the company's cost of retained earnings financing? to b. If underpricing and flotation costs on new shares of common stock amount to $8 per share, what is the company's cost of new common stock financing? c. The company can issue $159 dividend preferred stock for a market price of $26 per share Flotation costs would amount to $4 per share. What is the cost of preferred stock financing? d. The company can issue S1,000 par value, 7% coupon, 6 year bonds that can be sold for $1,140 each Flotation costs would amount to $30 per bond. Use the estimation formula to figure the approximate after-tax cost of debt financing? e. What is the WACC? K a. If the market price of the common stock is $34 and dividends are expected to grow at a rate of 8% per year for the foreseeable future, the company's cost of retained earnings financing is 12.29% (Round to two decimal places.) b. If underpricing and flotation costs on new shares of common stock amount to $8 per share the company's cost of new common stock financing is 13.61 %. (Round to two decimal places) c. If the company can issue $1.59 dividend preferred stock for a market price of $26 per share, and flotation costs would amount to $4 per share the cost of preferred stock financing is 723 % (Round to two decimal places.) d. If the company can issue $1,000-par-value, 7% coupon, 6-year bonds that can be sold for $1,140 each, and flotation costs would amount to $30 per bond, using the estimation formula, the approximate after-tax cost of debt financing is 3.77% (Round to two decimal places) e. Using the cost of retained earnings, the firm's WACC, /, Is 8.80% (Round to two decimal places) Using the cost of new common stock, ra, the firm's WACC, /, is %. (Round to two decimal places.)