5. Assume the same facts as in Problem4 above except that Kroft & Sons will raise all equity by issuing new stock. If the flotation costs are 10% of proceeds, what is Kroft & Sons' cost of new equity? 1.28 40.5 45(1-.105 +.048 = .07960 or 7.96% 6. Romrico Corp. has a target capital structure of 35% debt, 20% preferred stock and 45% common stock. Romrico's before tax cost of debt is 5% and its marginal tax rate is 38%. Its cost of common stock is estimated at 11.5% while its cost of preferred stock is estimated at 8%. What is Romrico's weighted average cost of capital (WACC)