Present Capital Structure Source of Capital Par/Maturity Value Total Book Value Market Value Debt (8%, 15 year) $1,000 $8,000,000 $1,200 per bond Preferred stock (8%) $100 $2,000,000 $120 per share Common stock $10 $10,000,000 $20 per share . The companys last common dividend was $0.97. The year before that, a dividend of $0.91 was paid. The growth rate for dividends is expected to be constant for the foreseeable future. The companys tax rate is 35%. a. Determine the weighted average cost of capital using market-value weights [20 marks] b. The directors of JN60 have been told that they can reduce the overall cost of capital by issuing more long-term debt. Write a memo (in good form) outlining the extent to which increasing the gearing of the company could have the desired effect. [10 marks]