2021 Current assets $2,000 Net fixed assets 3,000 Total assets $5,000 Accounts payable and accruals $700 Short-term debt 100 Long-term debt 1,650 Preferred stock (10,000 shares) 250 Common stock (50,000 shares) 1,125 Retained earnings 1,175 Total common equity $2,300 Total liabilities and equity $5,000 Skye's earnings per share last year were $3.50. The common stock sells for $50.00, last year's dividend (D_(0)) was $2.70, and a flotation cost of 11% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an anual rate of 8%. Skye's preferred stock pays a dividend of $3.60 per share, and its preferred stock sells for $30.00 per share. The firm's before-tax cost of debt is