WACC

Your Company is planning an expansion and needs to develop an estimate of the firm’s cost of capital. You have gathered the following data:• Tax rate is 40%• The price of Your Company’s 12 percent coupon, annual payment, noncallable $1,000 face value bonds with 15 years to maturity is $1,153.72. The company does not use short-term debt on a permanent basis. New bonds would be privately placed with no flotation cost.• The price of Your Company’s 10 percent, $100 par value, quarterly dividend preferred stock is $111.10.• Your Company’s common stock is selling for $50 per share. Its last dividend was $4.19, and dividends are expected to grow at a constant 5 percent rate. • If Your Company issues new common stock, it will incur a 15 percent flotation cost.•Your Company’s target capital structure is 30 percent long-term debt, 10 percent preferred stock, and 60 percent equity.Determine:(a) The cost of debt.(b) The cost of retained earnings.(c) The cost of new equity.(d) The WACC using retained earnings.