Northwest Uelity Company foces increasing needs for caphal. Fortunately, it has an Aa3 credit rating. The corpotate tax fate is 35 percont. Northwest's treasurer is trying to determine the corporation's current weighted average cost of capitat in order to assess the proftability of copital budgeting projects. Historically, the corporation's earnings and dividends per share have increased about 6.8 percent annually and this should continue in the future. Northwest's common stock is selling at $84 per share, and the company will pay a $6.40 per share dividend (D1). The company's $136 preferred stock has been yielding 9 percent in the current market. Flotation costs for the company have been estimnted by its investment banker to be $6.00 for preferred stock. The company's optimum capital structure is 50 porcent debt, 25 percent preferred stock, and 25 percent common equity in the form of retained earnings. Refer to the following table on bond issues for comparative yieids on bonds of equal risk to Northwest. a. Compute the cost of debt, Kd (Use the accompamying table-relate to the utility bond credit rating for yleld.) (Do not round Intermediate calculations. Input your answer as a percent rounded to 2 decimal piaces.) b. Compute the cost of preferted stock, Kp (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) c. Compute the cost of common equity in the form of retained earnings, K2, Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) d. Calculate the weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)