P9-17 (similar to) EQuestion Help Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights 35% long term debt, 10% preferred stock, and 55% common stock equity (retained earnings, new common stock, or both) The firm's tax rate is 24% Debt The firm can sell for S 1020 a 12-year, $1,000-plf-value bond paying annual interest at a 6 00% coupon rate A flotation cost of 4% of the par value is required Preferred stock 9 50% (annual dividend) preferred stock having a par value of $100 can be sold for S92 An additional tee of $6 per share must be paid to the underwriters Common stock The firm's common stock is currently seling for S90 per share. The stock has paid a dividend that a. The aner-tax cost of debt using the bonds yeld to maturity YTM) 5 (Round to two danal places ) % 9 O Type here to search 9-17 (similar to) Question Help * additonal tee ot s6 per share must be paid to the underwniters Common stock The firm's common stock is currently selling for $90 per share. The stock has paid a dividend that has gradually increased for many years, rising from $2.70 ten years ago to the $5,07 dividend payment, Do, that the company just recently made. If the company wants to issue new new common stock, it ill sell them $2.50 below the current market price to attract investors, and the company will pay $2.50 per share in flotation costs a. Calculate the after-tax cost of debt b. Calculate the cost of preferred stock c. Calculate the cost of common stock (both retained earnings and new common stock) d. Calculate the WACC for Dillon Labs a. The afterta cost of debt using the bonds yeld to maturity (YTM) ,% (Round to two dec mal places) O Type here to search