Use the following information to answer Questions 2 - 4; The DISC Company has 1,000,000 common shares outstanding. The book value per share is $40 The the beta of the company's common stock is 1.20 . The firm has 20,000 bonds outstanding. 20 years left to maturrently sells for $60 per share. The bonds were issued at par and there are The company also has 300,0 bonds are currently selling at 90 and pay an annual coupon of 10%. market price of each pref, 0008% preferred shares outstanding which pay annual dividends. The the market is 9%. DISC has share is $120. The risk-free rate is 3% and the expected return on a corporate tax rate of 40%. 2. What is the cost of equity for DISC? 10.2,1 3. What is the required rate of return on the preferred shares of DISC? 6,71 - 4. What proportion of DISC's capital structure is financed with common equity? 5261