The White Pepper Company is preparing for a major expansion project for which will bring their total capital needs to $12 million. They want to maintain their current capital structure mix. 1. The company's capital structure mix is shown in the table below. What is the correct weighting? Debt Preferred Common Stock stock Market price 110.5% of par 105% of $36.00 share Book value $2,250,000 $500,000 $2,250,000 Shares outstanding NA 5,000 150,000 par per 2. The company's bonds (20-year maturity, par value $1000, semiannual payment) are 5% coupon rate and sell at a market price of $1055. New bonds will have a flotation cost of $5 per bond. The company's tax rate is 34%. What is the after-tax cost of debt? 3. White Pepper can issue new preferred stock similar to its existing preferred stock. That has a par value of $100, pays a dividend of $12 per year and would be charged a $5 flotation costs. If the preferred stock is expected to sell at par, what is the cost of capital from preferred stock? 4. White Pepper's common stock has been selling at $24.50. They recently paid a dividend of $1.21 from EPS of $2.44. Five years ago earnings were $1.50. Earning and dividend growth are consistent and expected to remain constant over the foreseeable future. If new issuance of stock was necessary, flotation costs would run 15% of market. i. What is the cost of retained earnings? ii. If the company had to issue new stock, what would be the cost of new issue common stock? 5. If the company does not need to issue new common stock, what is the WACC