Questions 46 through 49 are based on the following information: Phillips Equipment has the following financial information: Debt: 80,000 bonds that are selling at 102 ($1020 each); the bonds are 8.5% semi-annual 30-year bonds and were issued five years ago. Preferred Stock: 750,000 shares pay a $7.00 annual dividend per share of the preferred stock with a price of $65 per share. Common Stock: 2.5 million shares of common stock with a current price of $42 per share; the beta of the stock is 1.34; the standard deviation of the stock is 10.5%. Market: The US Treasury bill is yielding 2.8% and the expected return on the market is 11.2%. The corporate tax rate is 38%. What is the firm's pretax cost of debt?

		4.15%
		8.31%
		8.50%
		8.24%
		8.52%

What is the firm's cost of equity?

		8.71%
		14.51%
		15.01%
		17.81%
		14.06%

What is the firm's cost of preferred stock?

		4.3%
		4.6%
		6.6%
		7.0%
		10.8%

What is the firm's WACC?

		9.8%
		10.3%
		11.0%
		11.4%
		12.7%