need help with 10-3 & 10-4 (problems NOT the questions)

h. The stock market falls drastically, and the firm's stock price falls along with the rest Investors become more risk-averse The firm is an electric utility with a large investment in nuclear plants. Several states are considering a ban on nuclear power generation Intermediate Problems 6-12 10-3 determined TO-2 Assume that the risk-free rate increases, but the market risk premium remo What impact would this have on the cost of debt? What impact it have of equity? How should the capital structure weights used to calculate the WACC be 10-4 Suppose a firm estimates its WACC to be 10%. Should the WACC be used to evaluate its potential projects, even if they vary in risk? If not, what might be "reasonabler capital for average-, high-, and low-risk projects? 10-5 Would the WACC be different if the equity for the coming year came solely in the form The WACC is a weighted average of the costs of debt, preferred stock, and common culated WACC depend in any way on the size of the capital budget? How might we retained earnings versus some equity from the sale of new common stock Woula policy affect the WACC? the che blems os barve 70-1 AFTER-TAX COST OF DEBT The Holmes Company's currently outstanding bonds par that would provide a similar yield to maturity. If its marginal tax rate is 25%, what an 8% coupon and a 10% yield to maturity. Holmes believes it could issue new bonds Holmes' after-tax cost of debt? COST OF PREFERRED STOCK Torch Industries can issue perpetual preferred stock ata 10-2 price of $57.00 a share. The stock would pay a constant annual dividend of $6.00 a stane What is the company's cost of preferred stock, r? 10-3 COST OF COMMON EQUITY Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's ou standing bonds is 9%, and its tax rate is 25%. Pearson's CFO estimates that the company's ? 10-4 COST OF EQUITY WITH AND WITHOUT FLOTATION Jarett & Sons' common stock currently trades at $30.00 a share. It is expected to pay an annual dividend of $1.00 a share at the end of the year (D, = $1.00), and the constant growth rate is 4% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? b. If the company issued new stock, it would incur a 10% flotation cost. What would be the cost of equity from new stock