1.

Suppose that JB Cos. has a capital structure of 75 percent equity, 25 percent debt, and that its before-tax cost of debt is 13 percent while its cost of equity is 17 percent. Assume the appropriate weighted-average tax rate is 25 percent.

What will be JBs WACC? (Round your answer to 2 decimal places.)

WACC %

2.

Suppose that B2B, Inc., has a capital structure of 36 percent equity, 16 percent preferred stock, and 48 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.0 percent, 10.0 percent, and 9.0 percent, respectively.

What is B2Bs WACC if the firm faces an average tax rate of 30 percent? (Round your answer to 2 decimal places.)

WACC %

3.

ILK has preferred stock selling for 96 percent of par that pays a 8 percent annual coupon.

What would be ILKs component cost of preferred stock? (Round your answer to 2 decimal places.)

Cost of preferred stock %