Question: 14. HBM, Inc. has the following capital structure: Assets $400,000 Debt $140,000 Preferred Stock $20,000 Common Stock $240,000 The common stock of the company has

14. HBM, Inc. has the following capital structure:
Assets $400,000 Debt $140,000
Preferred Stock $20,000
Common Stock $240,000
The common stock of the company has a of 1.5 and the expected market risk premium is 6%. The
rate on long-term Treasury bonds is 2%. The cost of preferred stock financing is 9.89%. The debt pays
an interest of 8.5% annually and the firm is paying 25% effective tax rate.
(a) What is the after-tax cost of debt?
(b) What is the cost of common stock?
(c) What is the firms weighted-average cost of capital?
a-c please and thank you

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