Retained earnings The firm expects to have available $100,000 of retained earnings in the vo ting year .nce hese retained e rings are exh usted the arm will use new com :on s.o k as he =i : of common stock equity financing. (Note: When measuring this cos., the firm does not concer.. itself with the tax jacket or brokerage fees of owners , TO .O Create a spreadsheet to a_ swer the foLowing questions. a Calculate the after-tax cost of debt. b Calculate the cost of , referred stock c Calculate the cost of retained earnings d Calculate the cost of new commo.. stock. e Calculate the firm's weighted average cost of capital using retained earnings and the capital structure weights shown i.. the table above. f. Calculate the firm's weighted a erage cost of ca, ita! using new common stock and the capital structure weights shown i.: the table above. Q2 B: 10% Assume that the risk-free lau Rx is wi ntly 8%, the Mark return, KM, s 2% nu asset-- has a beta, I . v. (could bed ech word do ume it D. ex el). a) Draw the se w.ity market i le (SAL) ) Use the CAPM to calculate the required return, on asset A c) Assume that as a result - I rece it eco.inmice exits, inflationary expectation is have de lined by 3%, lowering RF and RM t- 5 , and 9%, respectively. Draw the new SMi on the axes in part a, and calculate and show the new required return for asset A d) Assume that as a result of recent events, investors have become more risk averse, causing the market return to rise by 2%, to be14%. Ignoring the shift in part c, draw the new ML on the same set of axes that you used before, and calculate and show the new required return for asset A. e) From the previous changes, what conclusions can be drawn about the impact of (1) decreased inflationary expectations and (2) increased risk aversion on the required returns of risky assets