The firm has bonds that pay a 5% coupon rate, mature in 10

years and sell for $975. The preferred stock is selling for $35

and pays a $3.00 dividend. The common stock is selling for

$20, just paid a $2.25 dividend and is expected to grow by

6% for the indefinite future. Calculate the investors

required return for each of the above securities (hint: you

will solve for kb (YTM) for the bond; solve for kp for the

preferred stock; and kc for the common stock).