Question: I only have one chanse so please help! The Imaginary Products Co. currently has debt with a market value of $250 million outstanding. The debt

 I only have one chanse so please help! The Imaginary Products

Co. currently has debt with a market value of $250 million outstanding.

I only have one chanse so please help!

The Imaginary Products Co. currently has debt with a market value of $250 million outstanding. The debt consists of 9 percent coupon bonds (semiannual coupon payments) which have a maturity of 15 years and are currently priced at $1,315.30 per bond. The firm also has an issue of 2 million preferred shares outstanding with a market price of $23.00 per share. The preferred shares pay an annual dividend of $1.20 Imaginary also has 14 million shares of common stock outstanding with a price of $20.00 per share. The firm is expected to pay a $2.20 common dividend one year from today, and that dividend is expected to increase by 8 percent per year forever. If Imaginary is subject to a 40 percent marginal tax rate, then what is the firm's weighted average cost of capital? Calculate the weights for debt, common equity, and preferred equity. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answers to 2 decimal places, e.g. 15.25%) Debt Preferred equity Common equity Calculate the cost of debt. (Round intermediate calculations to 4 decima places, e.g. 1.2514 and final answer to 2 decinnal places, e.g. 15.25%.) Cost of debt

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