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Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $5,000,000 last year. From those earnings, the company paid a dividend of $1.18 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 25% debt, 15% preferred stock, and 60% common stock. It is taxed at a rate of 21%. a. If the market price of the common stock is $37 and dividends are expected to grow at a rate of 5% per year for the foreseeable future, what is the company's cost of retained earnings financing? b. If underpricing and flotation costs on new shares of common stock amount to $8 per share, what is the company's cost of new common stock financing? c. The company can issue $2.27 dividend preferred stock for a market price of $27 per share. Flotation costs would amount to $3 per share. What is the cost of preferred stock financing? d. The company can issue $1,000-par-value, 7% annual coupon, 9-year bonds that can be sold for $1,240 each. Flotation costs would amount to $20 per bond. What is the after-tax cost of debt financing? e. What is the WACC? a. If the market price of the common stock is $37 and dividends are expected to grow at a rate of 5% per year for the foreseeable future, the company's cost of retained earnings financing is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. ? 5 parts Clear All Check Answer remaining