QUESTION 5: JRS & Sons Inc. has a target capital structure that calls for 40 percent debt, 10 percent preferred stock and 50 percent common equity. The firm's current after-tax cost of debt is 6 percent and it can sell as much debt as it wishes at this rate. The firm's preferred stock currently sells for RM9.00 a share and pays a dividend of RM1.00 per share; however, the firm will net only RM8.00 per share from the sale of new preferred stock. JRS common stock currently sells for RM4.00 per share but the firm will net only RM3.40 per share from the sale of new common stock. The firm recently paid a dividend of RM0.20 per share on its common stock and investors expect the dividend to grow indefinitely at a constant rate of 10 percent per year. JRS expects to retain RM15,000.00 in earnings over the next year Answer the following questions A) What is the firm's cost of retained earnings? B) What is the firm's cost of newly issued common stock? C) What is the firm's cost of newly issued preferred stock? D) What will be the WACC if JRS is required to issue new preferred and common stocks? (2 marks) (2 marks) (1.5 marks) (2.5 marks)