The following information is known about Dilly Dilly Company:

Common stockholders' required rate of return 17.0%

Coupon rate on outstanding bond issue 10.0%

Yield to maturity on outstanding bond issue 12.0%

Explicit cost on non-callable preferred stock 14.0%

Tax rate 21.0%

Capital Structure:

Book value: 40% Bonds

20% Preferred Stock

40% Common Equity

Market Value: 30% Bonds

l0% Preferred Stock

60% Common Equity

1. What is the after-tax cost of debt? Cost of Preferred equity? Cost of common equity?

2. What is Dilly Dillys weighted average (after-tax) cost of capital (Kw)?