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Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of \\(...

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Finance

image Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of \\( \\$ 4,600,000 \\) last year. From those earnings, the company paid a dividend of \\( \\$ 1.15 \\) on each of its \\( 1,000,000 \\) common shares outstanding. The capital structure of the company includes \45 debt, \10 preferred stock, and \45 common stock. It is taxed at a rate of \21. a. If the market price of the common stock is \\( \\$ 47 \\) and dividends are expected to grow at a rate of \5 per year for the foreseeable future, what is the company's cost of retained earnings financing? b. If underpricing and flotation costs on new shares of common stock amount to \\( \\$ 7 \\) per share, what is the company's cost of new common stock financing? c. The company can issue \\( \\$ 1.82 \\) dividend preferred stock for a market price of \\( \\$ 27 \\) per share. Flotation costs would amount to \\( \\$ 3 \\) per share. What is the cost of preferred stock financing? d. The company can issue \\( \\$ 1,000 \\)-par-value, \12 annual coupon, 9 -year bonds that can be sold for \\( \\$ 1,180 \\) each. Flotation costs would amount to \\( \\$ 25 \\) per bond. What is the after-tax cost of debt financing? e. What is the WACC

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