Question #3 WACC calculations with Retained Earnings and New Equity Mycliff Inc. has outstanding bonds with a YTM of 11.25%. They are in the 40% tax bracket. They wish to maintain a capital structure of 35% debt, 10% preferred stock and 55% common equity. Total All Capital = $100,000 (Debt + Common Equity + Preferred) Mycliff Inc. can sell preferred shares for $110 that will pay an annual dividend of $12. Common shares currently sell for $35 and recently paid a per share dividend of $1.20. This dividend is expected to grow at a constant 8%. New shares can be sold with a flotation cost of 20%. Mycliff Inc. has retained earnings of $42 million. a) What is the WACC with retained earnings? b) What is the WACC with $10,000 of newly issued Common Stock (equity.h