Score: 0 of 14 pts 10 of 10 (1 complete HW Score: 3,33% 1.67 of 50 pts P9. similar to) Question Help Calculation of individual costs and WACC Dion Labs has asked to financial manager to measure the cost of each specific type of capital as well as the weighed average cost of capital. The weight average cost is to be measured by using the following weight: 40% long-term del 20%preferred stock, and 40% common stock wally retained earnings, new common stock, both). The firm's tax rate is 21% Debt The tem case for $1020 a 10-year $1,000 par value bond paying an interest in a 9.00% coupon rate. A rotation cost of 2% of the par value is required Preferred stock & 50% annual dividend preferred stock having a par value of $100 can be sold for $60. An addition fee of per share must be paid to the underwriters Common stock the firm's common stock w currently seling for 570 per share. The shock has pada dividend that has gradually created for many years, ang from $225 ten years ago to the $333 dividend payment, that the company just recently made of the company wants to issue new ww.common stock, it with $200 blow the current market price to tract investors, and the company will pay $400 per share infotation costs a Caste the after tax cost of dett . The conter dett using the bond's yield to maturity (TM)% (Round to two decinal places) Save Homework: Chapter 9 Score: 0 of 14 pts 10 of 10 (1 complete) HW Score: 3.33%, 1.67 of 50 pts own p9-17 (similar to) Question Help WARREN. WANI Debt The firm can sell for $1020 a 10-year. $1,000-par-value bond paying annual interest at a 9,00% coupon rate. A flotation cost of 2% of the par value is required Preferred stock 8.50% (annual dividend) preferred stock having a par value of $100 can be sold for $90. An additional fee of $6 per share must be paid to the underwriters Common stock The firm's common stock is currently selling for $70 per share. The stock has paid a dividend that has gradually increased for many years, rising from $2.25 ten years ago to the $3.33 dividend payment, Ds, that the company just recently made. If the company wants to issue new new common stock, it will sell them $2.00 below the current market price to attract investors, and the company will pay $4.00 per share in flotation costs. a. Calculate the after-tax cost of debt. b. Calculate the cost of preferred stock c. Calculate the cost of common stock (both retained earings and new common stock). d. Calculate the WACC for Dillon Labs a. The after-tax cost of debt using the bond's yield to matunity (YTM) is 3%. (Round to two decimal places.)
