Here is the condensed 2021 balance sheet for Skye Computer Company (in thousands of dollars): 2021 Current assets Net fixed assets $1,750 Total assets 3,250 $5,000 A Accounts payable and accruals $ 800 Short-term debt 100 Long-term debt 1,200 Preferred stock (15,000 shares) 400 Common stock (40,000 shares) 1,225 Retained earnings 1,275 Total common equity Total liabilities and equity $2,500 $5,000 Skye's earnings per share last year were $2.90. The common stock sells for $65.00, last year's dividend (Do) was $2.10, and a flotation cost of 8% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of 9%. Skye's preferred stock pays a dividend of $3.00 per share, and its preferred stock sells for $30.00 per share. The firm's before-tax cost of debt is 9%, and its marginal tax rate is 25%. The firm's currently outstanding 9% 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 1.474. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1.3 million.