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.

(a) The cost of debt.
(b) The cost of retained earnings.
(c) The cost of new equity.
(d) The WACC using retained earnings.