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Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $4,200,000 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 40% debt, 25% preferred stock, and 35% common stock. It is taxed at a rate of 30%. a. If the market price of the common stock is $43 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 nancing? b. If underpricing and otation costs on new shares of common stock amount to $6 per share, what is the company's cost of new common stock nancing? c. The company can issue $1.58 dividend preferred stock for a market price of $28 per share. Flotation costs would amount to $6 per share. What is the cost of preferred stock financing? d. The company can issue $1 ,000parvalue, 7% coupon, 10-year bonds that can be sold for $1,270 each. Flotation costs would amount to $25 per bond. Use the estimation formula to gure the approximate after-tax cost of debt nancing? a. What is the WACC