Part $2$:

Assuming no new common stock will be issued to the public so all new common equity will be internally generated, calculate effective costs and the weighted$-$average cost of capital for the firm based on the current capital structure, which is assumed to be optimal.

$6.$ What is the Effective Cost of the $4\mathrm{.}25\%$ Senior Debentures?

a$.2\mathrm{.}26\%$ b$.2\mathrm{.}81\%$ c$.4\mathrm{.}28\%$ d$.4\mathrm{.}44\%$ e$.5\mathrm{.}25\%$

$7.$ What is the Effective Cost of the $6\mathrm{.}85\%$ Senior Debentures?

a$.2\mathrm{.}49\%$ b$.4\mathrm{.}86\%$ c$.4\mathrm{.}91\%$ d$.5\mathrm{.}02\%$ e$.5\mathrm{.}97\%$

$8.$ What is the Effective Cost of the $7\mathrm{.}05\%$ Subordinated Debentures?

a$.2\mathrm{.}64\%$ b$.5\mathrm{.}21\%$ c$.5\mathrm{.}32\%$ d$.5\mathrm{.}49\%$ e$.6\mathrm{.}11\%$

$9.$ What is the Effective Cost of the $7\mathrm{.}60\%$ Preferred Stock?

a$.7\mathrm{.}51\%$ b$.7\mathrm{.}22\%$ c$.7\mathrm{.}09\%$ d$.6\mathrm{.}75\%$ e$.5\mathrm{.}93\%$

$10.$ What is the Effective Cost of the Internal Common Stock?

a$.7\mathrm{.}80\%$ b$.7\mathrm{.}68\%$ c$.7\mathrm{.}49\%$ d$.7\mathrm{.}01\%$ e$.6\mathrm{.}16\%$