Suppose Mullens Corporation is considering three average$-$risk projects with the following costs and rates of return:

Mullens estimates that it can issue debt at a rate of $r_d=10\mathrm{.}00\%$ and a tax rate of $T=20\mathrm{.}00\%.$ It can issue preferred stock that pays a constant

dividend of $D_p=$$$20\mathrm{.}00$ per year and at $P_p=$$$200\mathrm{.}00$ per share.

Also, its common stock currently sells for $P_0=$$$19\mathrm{.}00$ per share. The expected dividend payment of the common stock is $D_1=$$$4\mathrm{.}75$ and the

dividend is expected to grow at a constant annual rate of $g=5\mathrm{.}00\%$ per year.

Mullens' target capital structure consists of $w_s=75\mathrm{.}00\%$ common stock, $w_d=15\mathrm{.}00\%$ debt, and $w_p=10\mathrm{.}00\%$ preferred stock.

According to the video, the after$-$tax cost of debt can be stated as

$.$ Plugging in the values for $r_d$ and $(T)$ yields an after$-$tax cost of debt of

approximately

According to the video, the cost of preferred stock can be stated as

$.$ Plugging in the values for $D_p$ and $P_p$ yields a cost of preferred stock of

of approximately

Hint: Assume no flotation costs.

According to the video, the cost of common stock can be stated as

$.$ Plugging in the values for $D_1,P_0,$ and $g$ yields a cost of common stock

of approximately