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PIE Corporation has 8 . 7 5 million shares of common stock outstanding, 2 1 5 , 0 0 0 shares of RM 6 annual

PIE Corporation has 8.75 million shares of common stock outstanding, 215,000 shares
of RM6 annual dividend preferred stock outstanding, and 105,000 of 7.5% semi-annual
bond outstanding. The common stock is currently sells for RM34 per share and has a
beta of 1.5, the preferred stock currently sells for RM91 per share, and the bonds have
15 years to maturity and sell for 93% of par. The market risk premium is 8.5%, T-bills are
yielding 5%, and corporate tax rate is 35%. Calculate the following:
(a) Firms market value capital structure.
(b) Cost of equity.
(c) Cost of preferred stock.
(d) Cost of debt.
(e) Weighted Average Cost of Capital (WACC).

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