Consider the following data to solve problems 1 through 5.

A. The investment capital of Executive Consultants, Inc. is as follows:

Capital sources Capital

Debt (corporate bonds) $ 4,100,000

Preferred Shares $ 2,200,000

Common Shares $ 2,800,000

B. To generate the $ 4.1 million capital of corporate bonds, they issued bonds at $ 965 of par value, with an annual coupon of $ 100 for the next 10 years, with a flotation cost of $ 10 per bond.

C. The issuance of preferred shares has a cost of $ 5 per share and will pay a dividend of 10% of its par value of $ 110 per preferred share.

D. The risk-free rate is 3.45% and the market return is 11.25%. The company's beta coefficient is 1.23.

E. Executive Consultants, Inc. has a tax liability of 35%.

Problems:

To receive a score for answer, please present the procedure and all the calculations.

1. Determine the capital structure of Executive Consultants, Inc. (10 points)

2. Calculate the cost of debt. (10 points)

3. Calculate the cost of preferred capital. (10 points)

4. Calculate the cost of equity capital (common shares). (10 points)

5. Determine the weighted average cost of capital (WACC) for the firm. (10 points)