• The Media City Corporation is funded exclusively with common and preferred stock.
• The current share price of the companys common shares is $15.60 and the firms management has just made an announcement that they will pay a $1.25 dividend per share this year.
• After that, dividends are expected to grow by 4.8% per year.
• The firms preferred shares pay a $0.75 fixed dividend and are currently priced at $12.30.
• The company has 120,000 ordinary shares and 70,000 preferred shares outstanding.

1. Calculate the companys cost of common equity.

2. Estimate the companys cost of preferred equity.

3. Find the firms total market value of equity.

Determine the percentage of assets that the company finances through the issue of (i) common shares, and (ii) preferred shares.