Question 18 5 pts The following will be used to answer the next question. Debt: 15,000 10% coupon bonds outstanding, 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share. Common Stock: 300,000 shares outstanding selling for $80 per share, the beta is 1.5, the risk-free rate is 6% and the market risk premium is 7.5%. The company's tax rate is 20 percent. (Numbers in parentheses are negative) What is Rollins' after-tax cost of equity using the security market line (SML) approach (approximately)? 8.25% 11.25% 18.75% 17.25% 11.31% Question 19 5 pts The following will be used to answer the next question. Debt: 15,000 10% coupon bonds outstanding, 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share. Common Stock: 300,000 shares outstanding selling for $80 per share, the beta is 1.5, the risk-free rate is 6% and the market risk premium is 7.5%. The company's tax rate is 20 percent. (Numbers in parentheses are negative) What is the after-tax cost of preferred stock (approximately)? 5.5% O 3.3% 7.0% 7.3% 7.8% Question 20 5 pts The following will be used to answer the next question. Debt: 15,000 10% coupon bonds outstanding, 30 years to maturity, selling for 106 (bonds have a $1000 par value with semiannual interest payments) Preferred Stock: 20,000 shares of 7% preferred stock outstanding with a par value of $100 and currently selling for $128 per share. Common Stock: 300,000 shares outstanding selling for $80 per share, the beta is 1.5, the risk-free rate is 6% and the market risk premium is 7.5%. The company's tax rate is 20 percent. (Numbers in parentheses are negative) What is the weight of equity in this firm's capital structure (approximately)? 67% o o 75% o 57% 21% O 37%