part b only

3. Brook's Window Shields inc. is trying to calculate its coit of captal for ase it a capital budgeting decision. Mr. Gtask, the viceppresident of finance, has given you the follewing information aed has asked you to compute the weighted average cost of capital The company curreatly has outstanding a bond with a 8.0 pertent coepon fayeand another bond with a 5.0 pereent coupon rate. The firm has been infortesed by its thvestancet banker that boods of equal risk and eredit ratieg are noiw selting to yield 9.0 perceet. The coenmoa stock has a price of 592 and an expected dividend (DI) of 57 . 60 per share. The firm's historical growth rate of earnings and dividends per thare has becn 10.0 perset the becarity analyses on Wail Strset expect this growth ta slow to 9 perceet in future yeark- The preferred stock is selling at 588 per share and carries a dividead of 510.20 per share. The corporate tax rate is 30 perecet. The flotation cost is 2.7 percent of the selling price for preferred stock. The optimal capital structure is 20 percent debt, 25 percent peeferred steck, and 55 persent common squity ia the form of retaised carnings. (t5) Points) a. Compute the costof capital for the individual components in the capital structure. Cost of debt: 0,(120) Cost of preferred stock: Cost of equity: (977+3)+1+14 b. Calculate the weighted cost of each souree of capital and the weighted average cost of eapital