QUESTION 4 Lang Enterperson orested in measuring its overall cost of capital Current investigation has gathered the folong data. The firm is in the 21st bracket Debt Them canso debt by seang 51.000 para coupon interest rate, 11 year bonds on which mal interest payment will be made to sell the issue an average discount of $40 per band would have to be gun The firm shomapay fotation costs of $20 por bond Preferred stock The fim can set 6 55 preferred stock as -perche par value. The cost of issuing and selling the preferred stock is expected to be 56 per share Preferred Stock can be sold under these terms Common stock: The firm's common stock is currently selag for $75 perse The fem expects to pay cash dividends of per share next year. The findividends have broon growing at an annual rate of and this growth is expected to contine into where the stock must be underpriced by so person totation costs we expected to amount to 57 per share The fim can sew common stock under these terms Retained earnings When massering is cost the fim does not concem self with the tax bracket or brokerage res of owners expects to have available $150 000 of retained earnings in the coming you once these and earnings are used the firm will use new common stock is the form of common stock equity financing For parts and below assume that Capital since weights for the firm we as shown in the following table Source of capital Weight Long-term SON Preferred to 10 Common stock 40 100 The whole coste dobiting the room Round low decal Places The weber conto dating the band's yield to maturity (VTM Round wices The cost red stock l it teH V NHIU THI HAI 2014 Round to decals) the cost of new commons Round sowodacima 1 Using the cost of retained the WACC Hound to two decades o Umate cost of common stock the WACC SI Hound two decale