WACC and target weights. Afler careful analysis, Dexter Brothers has determined that its optimal capital structure is composed of the sources and target market value weights shown in the following table: The cost of debt is estimated to be 4.1\%; the cost of preferred stock is estimated to be 10.1\%; the cost of retained earnings is common stock is estimated to be 15.6\%. All of these are after-tax rates. The company's debt ropresents 24\%, the preferred stock represents 9%, and the common stock equity represents 67% of total capital on the basis of the markel values of the three components. The company expects to have a significant amount of retained eamings available and does not expect to sell any new common stock. a. Calculate the weighted average cost of capital on the basis of historicel market value weights. b. Calculate the weighted average cost of capital on the basis of target market value weights. c. Compare the answers obtained in parts a and b. Explain the differences. Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.)