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Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measu using the following weights: 30% long-term debt 25% preferred stock and 45% common stock equi Debt The firm can sell for $1000 a 13-year, $1,000-par-value bond paying annual interest at a 12.00 Preferred stock 9.00% (annual dividend) preferred stock having a par value of $100 can be sold fo Common stock The firm's common stock is currently selling for $90 per share. The stock has paid just recently made. If the company wants to issue new new common stock, it will sell them $3.50 bel 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 after-tax cost of debt using the bond's yield to maturity (YTM) is %. (Round to two decimal The after-tax cost of debt using the approximation formula is %. (Round to two decimal places.) b. The cost of preferred stock is %. (Round to two decimal places.) c. The cost of retained earnings is %. (Round to two decimal places.) The cost of new common stock is 1%. (Round to two decimal places.) d. Using the cost of retained earnings, the firm's WACC is %. (Round to two decimal places.) Using the cost of new common stock, the firm's WACC is 1%. (Round to two decimal places.) 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 rred stock, and 45% common stock equity (retained eamings, new common stock, or both). The firm's tax rate is 22%. ue bond paying annual interest at a 12.00% coupon rate. A flotation cost of 2% of the par value is required. having a par value of $100 can be sold for $88. An additional fee of $5 per share must be paid to the underwriters, mg for $90 per share. The stock has paid a dividend that has gradually increased for many years, rising from $2.25 ten years ago to the 54.22 dividend payment, Dy, that the company common stock, it will sell thern $3.50 below the current market price to attract investors, and the company will pay $3.00 per share in flotation costs. ngs and new common stock) writy (YTM) is % (Round to two decimal places.) is [% (Round to two decimal places.) imal places.) mecimal places.) cimal places.) %. (Round to two decimal places.) %. (Round to two decimal places.)