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The following table gives the balance sheet for Travellers Inn Inc. ( TII ) , a company that was formed by merging a number of

The following table gives the balance sheet for Travellers Inn Inc. (TII), a company that was formed by merging a number of regional motel chains.
The following facts also apply to TII:
yield to maturity.
The stock has a beta of 1.6. The T-bond rate is 5%, and RPM is estimated to be 5%.
responses suggested a risk premium over TII bonds of 4 percentage points.
TII is in the 25% federal-plus-state tax bracket.
a. What are the current market value weights for debt, preferred stock, and common stock? (Hint: Do your work in dollars, not millions of dollars.)
b. What is the after-tax cost of debt?
%
c. What is the cost of preferred stock?
%
d. What is the required return on common stock using CAPM?
%
%
f. What is the required return on common stock using the own-bond-yield-plus-judgmental-risk-premium approach?
%
g. What is Travellers' WACC? Use the required returns on stock from part e.
% Please use Excel if possible to answer the question and show the formula.
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