4. A firm has determined its optimal capital structure which is composed of the following sources and target market value proportions. Source of Capital Long-term debt Preferred stock Common stock equity Target Market Proportions 20% 10 70 Debt: The firm can sell a 12-year, $1,000 par value, 7 percent bond for $960. A flotation cost of 2 percent of the par value would be required in addition to the discount of $40. The coupon payment is semi-annual. Additionally, the firm's marginal tax rate is 40 percent. Preferred Stock: The firm has determined it can issue preferred stock at $75 per share par value. The stock will pay a $10 annual dividend. The (flotation) cost of issuing and selling the stock is $3 per share. Common Stock: A firm's existing common stock is currently selling for $18 per share. The dividend expected to be paid at the end of the coming year is $1.74. Its dividend payments have been growing at a constant rate of 4% for the last four years and are expected to continue growing at this rate. New common stock issues must be underpriced $1 per share in flotation costs. Calculate: a. the after-tax cost of new debt b. the cost of new preferred stock c. the cost of new common stock using the discounted cash flow method d. the WACC