Book value

Market value

Target $\%$

Debt

$48\%$

$25\%$

$30\%$

Preferred stock

$2$

$5$

$10$

Common equity

$50$

$70$

$60$

A $15-$year, $12\%$ semiannual

coupon bond sells for $$1,153\mathrm{.}72.$

What is the cost of debt $($rd$)?$

What is the cost of preferred stock?

If new common stock issue incurs a flotation cost of $15\%$ of the proceeds, what is re$?$

What is the firm$$s WACC $($ignoring flotation costs$)?$