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Calculation of individual costs and Access Chh Debt Thermostanu 000 wenden www Preferred stack The focal to 100 The.co Common stock The coon Shwe ped to pay The future The Kenya.com expect the mom Retained earning When muring them come in the correo mwili won stock as the form of contactancing the cost of a Cache cost oprettet stock Cathcomic . The cost of debt ingroom.cn Debt The man and trying 51.000 par coupon forest rate tye bonds with me to fotocols of 5 per bond Preferred stock The firm co se preferred toch al 5100 per shape the connect Common stock The common stock is cursing 500 per here the tech to payah di 45 per wey The the future. The stock must be underpriced typer shtetin expect to cha Town Retained earnings Whering this cost the fim do not concerns with acces the Tom wil new common ock as the form of common stock guy trancing Calculate the tax cost of dott b Cake the cost oprettet och c. Cote the cost of common stock Calculate the firm's weigd average cont of capital using the capitaineture with own De Tale The attor tax cost of debt using the cornmattor Mound to two decim Source of capital 15 Pred dock Como Par Done Calculation of individual costs and WACC Lang Enterprises is interested in measuring its overall cost of capital Current investigation has gathered the following data. The firm is in the 29% tax bracket Debt The firm can raise debt by selling $1,000-par-value, 9% coupon interest rate, 18-year bonds on which annual interest payments will be made. To sell the issue, an average discount of $50 per bond would have to be given. The firm also must pay flotation costs of $35 per bond. Preferred stock The firm can sell 6% preferred stock at its $100-per-share par value The cost of issuing and selling the preferred stock is expected to be $6 per share. Preferred stock can be sold under these terms Common stock The firm's common stock is currently selling for $90 per share. The firm expects to pay cash dividends of $45 per share next year. The firm's dividends have been growing at an annual rate of 8%, and this growth is expected to continue into the future. The stock must be underpriced by $8 per share and lotation costs are expected to amount to $4 per share. The firm can sell new common stock under these terms Common stock The firm's common stock is currently selling for $90 per share. The firm expects to pay cash dividends of $4.5 per share next year. The firm's dividends have been growing at an annual rate of 8%, and this growth is expected to continue into the future. The stock must be underpriced by $8 per share, and flotation costs are expected to amount to $4 per share. The firm can sell new common stock under these terms Retained earnings When measuring this cost, the firm does not concern itself with the tax bracket or brokerage fees of owners. It expects to have available $140,000 of retained earnings in the coming year, once these retained earnings are exhausted, the firm will use new common stock as the form of common stock equity financing a. Calculate the after-tax cost of debt. b. Calculate the cost of preferred stock c. Calculate the cost of common stock d. Calculate the firm's weighted average cost of capital using the capital structure weights shown in the following table, (Round answer to the nearest 0.01%) - X places) i Data Table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Source of capital Weight Long-term debt 40% Preferred stock 15 Common stock equity 45 Total 100% Print Done Check

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