use the second picture to find out as they are related

1. The capital structure of John Lewis is below Source Target market proportions Long-term debt 50% Preferred stock 10 Common stock equity 40 PREFERRED STOCK: The firm has determined it can issue preferred stock at $55 per share par value. The stock will pay an $6.00 annual dividend. The cost of issuing and selling the stock is $1.9 per share. DEBT: The firm can sell a 20 year, $1,000 par value, 12 percent bond for $900. A flotation cost of 2.5 percent of the face value. COMMON STOCK: The dividend expected to be paid at the end of the coming year is $5.07 and selling price is $49. Its dividend payments have been growing at a constant rate for the last 6 years. Six years ago, the dividend was $2.45. the cost of issuing the stock was $2.5. the firm's marginal tax rate is 35 percent. What is the cost of capital of the firm? If you are a finance manager of the company and your task is to reduce the cost of capital .In this situation how you can minimize the cost. Explain 15 Now Johnlewis is planning to analyze two projects.Project Alpha and Beta the following expected net cash flows: Alpha Beta Year O Nm" un Cash Flow $600,000 250,000 300,000 350,000 250,000 100,000 Cash Flow $600,000 450,000 400,000 300,000 200,000 Assume you are a finance manager of John Lewis. Which project you should Choose based on NPV? Would your decision change if payback method was used? Or Discounted Pay back period? Which method you think is the best to find out the solution and why? Why you are not choosing the other two methods? Total 15