Here is the condensed $2021$ balance sheet for Skye Computer Company $($in thousands of dollars$)$:

$2021$

Current assets $ $1,750$

Net fixed assets $3,250$

Total assets $ $5,000$

Accounts payable and accruals $ $900$

Short$-$term debt $100$

Long$-$term debt $1,900$

Preferred stock $(10,000$ shares$)300$

Common stock $(40,000$ shares$)875$

Retained earnings $925$

Total common equity $ $1,800$

Total liabilities and equity $ $5,000$

Skye's earnings per share last year were $$3\mathrm{.}40.$ The common stock sells for $$50\mathrm{.}00,$ last year's dividend $($D$0)$ was $$2\mathrm{.}40,$ and a flotation cost of $10\%$ would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of $8\%.$ Skye's preferred stock pays a dividend of $$3\mathrm{.}50$ per share, and its preferred stock sells for $$35\mathrm{.}00$ per share. The firm's before$-$tax cost of debt is $11\%,$ and its marginal tax rate is $25\%.$ The firm's currently outstanding $11\%$ annual coupon rate, long$-$term debt sells at par value. The market risk premium is $4\%,$ the risk$-$free rate is $5\%,$ and Skye's beta is $1\mathrm{.}802.$ The firm's total debt, which is the sum of the company's short$-$term debt and long$-$term debt, equals $$2$ million.