Use the following for the next THREE questions. As financial manager for Corporation you are trying to determine the firm's weighted average cost of capital The firm can issue bonds at a price of $1050 with a coupon rate of 8%, 10 years to maturity, and a value of $1000Common stock dividends grow at a constant rate of 4% annually. They are expected to pay a 4 dividend at the end of the year. The current stock price is $25 and the firm's tax rate is 30% Preferred stock pays a 4.50 dividend and can be sold for $30 per share .

1) Compute the after- tax cost of debt? a 6.80 % b . 5.10% 8.93 d. 7.91% e . 5.6% f. 8.0 %

2) Use DCF (constant dividend growth model) to estimate the cost of common stock. a 4.16% b. 24.8% . 15% d. 19.0% e 20.0 %

3) What is the cost of preferred stock? a 6.67 b. 8.15% 10.0% d. 13.30 % e . 15.0 % f. 19%

4) The "bond yield plus risk premium" method is used to estimate a firm's cost of:

a)debt b) preferred stock c)common stock