Problem 1 (15 points): Emerson Corporation has 15.000 bonds outstanding each with the following characteristics: Maturity Par Value Coupon Rate Market Price 10 years $1,000 5% (semi-annual) 5975.55 It also has 20,000 preferred shares outstanding paying a dividend of 8 and currently trading at $122 per share and 550,000 shares of common stock outstanding currently trading at $95. Over the past year, the daily returns of the common stock price of Emerson have shown a covariance with the market of 0.01, while the standard deviation of the market index was about 11% The Risk Free rate is at 3% and the expected return of the market is 10% From the most recent financial statements of Emerson Corporation, the marginal tax rate is 35 and its balance sheet shows a debt-to-equity ratio (excluding preferred shares) of 56% 2. In order to calculate the WACC (weighted average cost of capital), what are the weights that should be used for each component of Emerson capital structure? b. Using the information given, what is the before-tax cost of debt for Emerson