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The preferred stock is selling at $90 per share and pays a dividend of $8.50 per share. The corporate tax rate is 30 percent. The

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The preferred stock is selling at $90 per share and pays a dividend of $8.50 per share. The corporate tax rate is 30 percent. The flotation cost is 2.2 percent of the selling price for preferred stock. The optimum capital structure for the firm is 10 percent debt, 10 percent preferred stock, and 80 percent common equity in the form of retained earnings. a. Compute the historical growth rate. (Do not round intermediate calculations. Round the final to 2 decimal places.) Growth rate % b. Compute the cost of capital for the individual components in the capital structure. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) c. Calculate the weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate colculations. Round the final answers to 2 decimal places.)

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