A-Rod Manufacturing Company is trying to calculate its cost ofcapital for use in making a capital budgeting decision. Mr. Jeter,the vice-president of finance, has given you the followinginformation and has asked you to compute the weighted average costof capital. The company currently has outstanding a bond with a10.1 percent coupon rate and another bond with an 7.7 percent rate.The firm has been informed by its investment banker that bonds ofequal risk and credit rating are now selling to yield 11.0 percent.The common stock has a price of $55 and an expected dividend (D1)of $1.75 per share. The historical growth pattern (g) for dividendsis as follows: $ 1.30 1.44 1.59 1.75 The preferred stock is sellingat $75 per share and pays a dividend of $7.10 per share. Thecorporate tax rate is 30 percent. The flotation cost is 2.0 percentof the selling price for preferred stock. The optimal capitalstructure for the firm is 25 percent debt, 10 percent preferredstock, and 65 percent common equity in the form of retainedearnings. a. Compute the historical growth rate. (Do not roundintermediate calculations. Round your answer to the nearest wholepercent and use this value as g. Input your answer as a wholepercent.) b. Compute the cost of capital for the individualcomponents in the capital structure. (Use the rounded whole percentcomputed in part a for g. Do not round any other intermediatecalculations. Input your answers as a percent rounded to 2 decimalplaces.) c. Calculate the weighted cost of each source of capitaland the weighted average cost of capital. (Do not roundintermediate calculations. Input your answers as a percent roundedto 2 decimal places.)