Dillon Labs has asked its financial manager to measure the costof each specific type of capital as well as the weighted averagecost of capital. The weighted average cost is to be measured byusing the following? weights: 30?% ?long-term debt, 25?% preferred?stock, and 45?% common stock equity? (retained earnings, newcommon? stock, or? both). The? firm's tax rate is 28?%. Debt Thefirm can sell for ?$1,015 a 17?-year, ?$1,000?-par-value bondpaying annual interest at a 9.00?% coupon rate. A flotation cost of2?% of the par value is required. Preferred stock??8.50?% ?(annualdividend) preferred stock having a par value of ?$100 can be soldfor ?$92. An additional fee of ?$6 per share must be paid to theunderwriters. Common stock??The? firm's common stock is currentlyselling for ?$59.43 per share. The stock has paid a dividend thathas gradually increased for many? years, rising from ?$2.00 tenyears ago to the ?$3.93 dividend? payment, Upper D 0?, that thecompany just recently made. If the company wants to issue new newcommon? stock, it will sell them ?$3.00 below the current marketprice to attract? investors, and the company will pay ?$3.00 pershare in flotation costs.??

a.??Calculate the? after-tax cost of debt.

b.??Calculate the cost of preferred stock.

c.??Calculate the cost of common stock? (both retained earningsand new common? stock).

d.??Calculate the WACC for Dillon Labs.