Reference is made to the 2022 Balance Sheet of Tram-Ropes limited. Tram-Ropes Limited Balance Sheet 2022 Cash 1,000,000.00 Accounts Payable 8,000,000.00 Acc. Receivable 12,000,000.00 Notes Payable 8,500,000.00 Marketable securities 3,000,000.00 Long-term Debt 20,000,000.00 Inventories 7,500,000.00 Common stock 7,500,000.00 Fixed Assets 26,500,000.00 Preferred Stock 6,000,000.00 Total Assets 50,000,000.00 Total Liabilities and Equity 50,000,000.00

Additional Information:

i. The Long-Term debt consists of 8% annual coupon bonds, with 15 years to maturity and are currently selling for 95% of par.

ii. The companys common shares which have a book value of $20 per share are currently selling at $25 per share.

iii. Preferred shares have a book value of $ 100 per share. These shares are currently selling at $120 per share and pays dividends of 6% per annum on book value.

iv. The dividend growth rate is expected to be 3%, and dividend for 2023 is projected to be $5.00 per share.

v. The Companys Tax rate is 30%.

Required:

Determine the following for Tram-Ropes Limited:

1. Total Market value of the firms capital structure (3 marks)
2. After-tax Cost of Debt
3. Cost of Common Stock
4. Cost of Preferred Stock
5. WACC (2 marks)